Oil gains after worst losing streak since October

On Monday, global oil prices recovered from a seven-day decline. The positive dynamics can be attributed to gains of global stock markets following last week's sell-off. At the same time, the growth of commodity prices is constrained by investors' concerns about oil demand and a stronger US dollar.

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Thus, at the moment of preparing this material, Brent crude oil futures for November delivery increased by 3.1% to settle at $66.76 per barrel, and October delivery - by 3.18% to $67.25 per barrel. WTI crude oil futures for September delivery added 3.04% to reach $64.03 per barrel.

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At the same time, the previous trading week has been the longest losing streak since October 2020. Over the past seven days, Brent crude has sunk more than 8%, and WTI has lost about 9% amid market participants' concerns about demand in the face of the rapid spread of COVID-19. Downbeat coronavirus statistics from the United States, China, and some states of Southeast Asia had a severe impact on the quotes.

Investors were worried about the prospects of another tightening of lockdown measures and a possible slowdown of global economic recovery. In addition, the previous week was marked by huge seff-offs in the stock markets. Thus, Asian stocks fell by 5.8%, European - by 1-4%, and US - by 0.5-1%.

However, on Monday, the indices changed their direction: the Asia-Pacific markets increased by 2.3%, and the European stock exchanges added almost 1%.

According to experts, this is a sign of a correction in the commodity market. At the same time, market sentiment for the current week will most likely remain bearish amid concerns about a decrease in global fuel demand.

Besides, oil prices are weighed down by a stronger US dollar. Thus, on Monday, the American currency is trading near nine-month highs against a basket of major currencies.

The US Federal Reserve's symposium scheduled for August 26-27 is currently in the focus of oil market participants. The day before, the regulator announced that it was preparing to start reducing the volume of asset purchases. Therefore, the further dynamics of the oil market will depend on the outcome of the Fed's meeting.

Commodity market analysts expect that in the short term, Brent oil quotes will be able to consolidate above $65 per barrel. However, if the Fed meeting turns out to be negative for investors, the price may fall to $62-63 per barrel.

The material has been provided by InstaForex Company - www.instaforex.com

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