Wednesday, October 20, 2021

Oil up, but heads for largest weekly loss since March on demand worries

Must read

imageCommodities7 minutes ago (Aug 06, 2021 03:02AM ET)

2/2
(C) Reuters. FILE PHOTO: A gas pump is seen hanging from the ceiling at a petrol station in Seoul June 27, 2011. REUTERS/Jo Yong-Hak

2/2

By Naveen Thukral and Florence Tan

SINGAPORE (Reuters) -Oil prices extended gains on Friday, but remained on track for their biggest weekly decline since March as travel restrictions to curb the spread of the COVID-19 Delta variant are raising concerns about fuel demand.

Brent crude oil futures were up 47 cents at $71.76 a barrel at 0640 GMT while U.S. West Texas Intermediate (WTI) crude futures rose 45 cents to $69.54 a barrel, but both contracts have given up 6% this week, the most since March.

“The price action we see now is really a function of the macro picture,” said Howie Lee, an economist at Singapore’s OCBC bank.

“The Delta variant is now really starting to hit home and you see risk aversion in many markets, not just oil.”

Japan is poised to expand emergency restrictions to more prefectures while China, the world’s second-largest oil consumer, has imposed curbs in some cities and cancelled flights, threatening fuel demand.

“At least 46 cities have advised against travelling, and authorities have suspended flights and stopped public transport. This could impact oil demand as it comes towards the end of the summer travel season,” ANZ said in a report.

Daily new COVID-19 cases in the United States have climbed to a six-month high.

However, worries over rising tensions between Israel and Iran limited the decline in prices.

“In the short-term oil prices are likely to be stuck in a range-bound environment,” CMC Markets analyst Kelvin Wong said, with WTI trading between $66.30 and $75.70 per barrel.

He said that oil’s upside has also been capped by improving crude supplies in the United States while non-farm payroll data due later on Friday has lent a cautious air to trading.

Oil up, but heads for largest weekly loss since March on demand worries

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

Latest article

SUBSCRIBE HERE