(Bloomberg) — was steady at the open of trading after capping the worst losing streak in more than three years amid dollar strength and economic strains from the latest Covid-19 comeback.
Futures in London traded near $65 a barrel after falling for a seventh session on Friday, the longest run of declines since February 2018. An indication by the Federal Reserve that it would start tapering stimulus strengthened the dollar, making raw materials priced in the currency more expensive. The virus flare-up has led to tight restrictions on mobility in some regions, including China.
Oil’s scorching rally over the first half of the year has run into stiff headwinds recently as the Covid-19 comeback across the globe raised questions about the short term outlook for demand. The resurgence may prompt OPEC+ to reassess its pledge to keep boosting output each month as renewed lockdowns and curbs on travel crimp fuel consumption. The group next meets on Sept. 1.
The Covid-19 flare-up has also weakened the oil futures curve. The prompt timespread for Brent was 44 cents a barrel in backwardation — where near-dated contracts are more expensive than later-dated ones. That compares with 92 cents at the end of July.
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