By Peter Nurse
Investing.com — Crude oil prices weakened Thursday, handing back some gains after a three-day rally, with fresh outbreaks of Covid-19 infections continuing to weigh on the overall market sentiment.
By 9:45 AM ET (1345 GMT), futures were down 1.4% at $66.41 a barrel, while futures were down 1% at $69.57 a barrel. Both benchmarks had risen by around 10% over the first three days of the week.
U.S. Gasoline RBOB Futures were down 1% at $2.2778 a gallon.
Concerns about global Covid-19 outbreaks, particularly involving the fast-spreading delta variant, continue to cloud the outlook for fuel demand and commodities in general.
Adding to the pessimism Thursday was the news that some production had been restored at an offshore platform in Mexican waters run by state-run oil company Petroleos Mexicanos, after a deadly fire over the weekend halted drilling, cutting output by over 400,000 barrels per day.
However, these losses are minor when compared with the gains year to date as the global economy, and the U.S., the world’s largest energy consumer, in particular.
Data released earlier Thursday showed the U.S. economy grew a bit faster than initially thought in the second quarter, climbing at a , lifting the level of gross domestic product above its prepandemic peak.
Additionally, the U.S. reported on Wednesday that American crude inventories fell last week for a third consecutive week and overall fuel demand increased to the most since March 2020.
Away from the U.S., air travel has climbed sharply in India, the third largest oil consumer in the world, as the country recovers from a deadly Covid-19 wave, resulting in a spike in demand for jet fuel.
Jet fuel sales have seen the biggest month-on-month increase in more than a year, according to preliminary data for the first half of August, although they are still 45% below the same period in 2019.
Attention now turns to the Federal Reserve’s , particularly Chairman Jerome Powell’s speech Friday, as the impact on the dollar will also affect how the crude market behaves.
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