Why have crude oil prices been falling over the last few days?

Just a month back, traders were talking about crude oil crossing $85/bbl but things appear to have changed sharply in the last few weeks. After a frenetic rally that took crude oil a tad beyond $75/bbl, oil prices have been consistently under pressure. There are two reasons for the same; one is weak demand in the light of the COVID variant and the second is the strong dollar. On 19 August, oil was down for the sixth consecutive trading session.

Ironically, this oil price performance is coming in the middle of major global oil producers planning huge supply hikes and capital investments in the oil exploration business. Brent Crude fell 3.6% on Thursday to $65.82/bbl while the WTI crude fell 3.9% to $62.67/bbl. That is more than $10 off the recent peaks. The dollar hit a 9-month high after Fed minutes giving a tapering cue, around end of 2021. The US gasoline inventories have also surged last week.