- Rise in coronavirus cases among major U.S. and Chinese consumers weighs in
- Tensions in the Middle East are supporting prices
LONDON, Aug.6 (Reuters) – Oil prices edged up on Friday, but remained on track for their biggest weekly decline since March amid concerns over the impact on fuel demand of travel restrictions targeting curb the spread of the Delta variant of COVID-19.
Brent crude oil futures rose 39 cents to $ 71.68 a barrel at 9:40 a.m. GMT and US West Texas Intermediate (WTI) crude futures rose 39 cents to $ 69.48, although both contracts dropped 6% this week.
“The price development that we are seeing now is really a function of the macro situation,” said Howie Lee, an economist at Singapore’s OCBC bank. “The Delta variant is now really starting to take effect and you are seeing risk aversion in many markets, not just oil.”
Japan is set to extend emergency restrictions to more prefectures while China, the world’s second-largest oil consumer, has imposed restrictions in some cities and canceled flights. Read more
“At least 46 cities have advised against travel and authorities have suspended flights and halted public transport. This could impact the demand for oil as the end of the summer travel season approaches,” ANZ said in a report.
Daily new cases of COVID-19 in the United States have peaked in six months. Read more
However, oil prices have been supported by rising tensions between Israel and Iran. Read more
“OPEC + supply increases are expected to leave the market in deficit again in 2021,” Bank of America analysts said.
Reporting by Dmitry Zhdannikov, Naveen Thukral and Florence Tan Editing by David Goodman
Our Standards: The Thomson Reuters Trust Principles.