Oil drops in biggest weekly drop in months amid demand concerns

  • Largest weekly decline in 4 months for Brent, in 9 months for WTI
  • Rise in coronavirus cases among major U.S. and Chinese consumers weighs in
  • Dollar rallies towards biggest weekly gain since June
  • U.S. Oil Rigs Increase Two To 387 This Week – Baker Hughes

NEW YORK, Aug.6 (Reuters) – Oil prices fell about 1% on Friday, posting their largest weekly losses in months, fears that travel restrictions aimed at curbing the spread of the Delta variant of COVID -19 will derail the global recovery in energy demand.

Crude futures also came under pressure as the dollar strengthened after monthly US job growth was higher than expected. A stronger dollar makes oil denominated in greenbacks more expensive for buyers of other currencies. Read more

Brent crude oil futures fell 59 cents, or 0.8%, to $ 70.70, while US West Texas Intermediate (WTI) crude futures fell 81, or 1 , 2%, to settle at $ 68.28 per barrel.

For the week, the global benchmark Brent lost more than 6%, its strongest week of losses in four months, and WTI fell nearly 7% in its biggest weekly decline in nine months.

“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.”

US President Joe Biden has said COVID-19 cases in the United States, which peaked in six months, will rise before dropping and the new Delta variant is wreaking unnecessary havoc in the country. Read more

Japan is set to extend emergency restrictions to more parts of the country, while China, the world’s second-largest oil consumer, has imposed restrictions in some cities and canceled flights. Read more

“The increase in travel restrictions in China has come under the microscope of traders and could become a key driver of oil prices during the month,” said Jim Ritterbusch, president of Ritterbusch and Associates LLC in Galena, in the Illinois.

U.S. oil rigs increased by two to 387 this week, energy services firm Baker Hughes Co. said. Growth in the number of rigs has slowed in recent months as drillers continue to focus on drilling. discipline of capital.

Additional reporting by Noah Browning Dmitry Zhdannikov Editing by Marguerita Choy and David Gregorio

Our Standards: Thomson Reuters Trust Principles.

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