Oil Falls on Demand Concerns And The End of Holiday Season in US

Oil prices fell on Tuesday, September 8, amid concerns about fuel demand as the summer holiday season in the United States comes to an end, and a long Labor Day weekend has increased fears of an increase in coronavirus cases in more US states.

US West Texas Intermediate crude futures fell $ 1.07, or roughly 3%, to $ 38.70 a barrel by 06:35 GMT, catching up with a drop in Brent prices overnight.

Brent crude futures fell 15 cents, or 0.4%, to $ 41.86 a barrel, after falling 1.5% on Monday.

Brent slipped on Monday after Saudi Aramco, the world’s largest oil exporter, lowered its official selling prices for its Arab Light crude in October, an indication that demand growth may falter as COVID-19 cases rise around the world.

WTI and Brent crude have fallen below their holding ranges throughout August, while West Texas crude is now down below $ 40 after it was trading at around $ 42 for most of the month. Brent is down from about $ 45. The market was supported by the weak US dollar which has recovered slightly since then.

The rise in the dollar in general also puts pressure on primary commodities as this raises the cost of oil priced in the US currency to global buyers. On the following day, due to minor holiday trading, the dollar rose slightly against a basket of currencies and rose slightly against the euro.