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Oil prices rose early on Friday, but still headed for their worst weekly performance since March, depressed by rising COVID cases in many countries and renewed travel restrictions at the world’s largest oil importer , China.
At 8:41 a.m. EDT on Friday, WTI crude was up 0.59% to $ 69.80. Brent Crude was trading up 1.14% at $ 72.10.
Both benchmarks, however, were down more than 5% for the week, the worst result for oil prices since March of this year.
This week, oil has stabilized in three straight sessions amid fears that the faster-spreading Delta variant could slow demand in China and the rest of Asia. China has reimposed massive travel restrictions and halted public transport in several cities as it tries to keep the worst COVID outbreak since the initial outbreak in Wuhan under control. Elsewhere across fuel-intensive Asia, Thailand and Malaysia reported new record daily cases on Thursday, the Philippines brought their capital Manila under control and Japan reported new record cases in Tokyo. Some experts have called for extending emergency measures for Tokyo nationwide.
As Asia closes in, the United States and Europe remain open despite the upsurge in Delta variant cases there as well.
The biggest concern for oil demand right now comes from China and the rest of Asia. China orders closures and travel restrictions early on with only several dozen new cases daily in its attempt to stop the spread. These blockages affect millions of people, which could reduce the demand for fuel.
“At least 46 cities have advised against travel and authorities have suspended flights and stopped public transport. This could impact demand for oil as the summer travel season approaches, ”Reuters said quoting ANZ in a report.
By Tsvetana Paraskova for OilUSD
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