AIRLINK 81.10 Increased By ▲ 2.55 (3.25%)
BOP 4.82 Increased By ▲ 0.05 (1.05%)
CNERGY 4.09 Decreased By ▼ -0.07 (-1.68%)
DFML 37.98 Decreased By ▼ -1.31 (-3.33%)
DGKC 93.00 Decreased By ▼ -2.65 (-2.77%)
FCCL 23.84 Decreased By ▼ -0.32 (-1.32%)
FFBL 32.00 Decreased By ▼ -0.77 (-2.35%)
FFL 9.24 Decreased By ▼ -0.13 (-1.39%)
GGL 10.06 Decreased By ▼ -0.09 (-0.89%)
HASCOL 6.65 Increased By ▲ 0.11 (1.68%)
HBL 113.00 Increased By ▲ 3.50 (3.2%)
HUBC 145.70 Increased By ▲ 0.69 (0.48%)
HUMNL 10.54 Decreased By ▼ -0.19 (-1.77%)
KEL 4.62 Decreased By ▼ -0.11 (-2.33%)
KOSM 4.12 Decreased By ▼ -0.14 (-3.29%)
MLCF 38.25 Decreased By ▼ -1.15 (-2.92%)
OGDC 131.70 Increased By ▲ 2.45 (1.9%)
PAEL 24.89 Decreased By ▼ -0.98 (-3.79%)
PIBTL 6.25 Decreased By ▼ -0.09 (-1.42%)
PPL 120.00 Decreased By ▼ -2.70 (-2.2%)
PRL 23.90 Decreased By ▼ -0.45 (-1.85%)
PTC 12.10 Decreased By ▼ -0.89 (-6.85%)
SEARL 59.95 Decreased By ▼ -1.23 (-2.01%)
SNGP 65.50 Increased By ▲ 0.30 (0.46%)
SSGC 10.15 Increased By ▲ 0.26 (2.63%)
TELE 7.85 Decreased By ▼ -0.01 (-0.13%)
TPLP 9.87 Increased By ▲ 0.02 (0.2%)
TRG 64.45 Decreased By ▼ -0.05 (-0.08%)
UNITY 26.90 Decreased By ▼ -0.09 (-0.33%)
WTL 1.33 Increased By ▲ 0.01 (0.76%)
BR100 8,052 Increased By 75.9 (0.95%)
BR30 25,581 Decreased By -21.4 (-0.08%)
KSE100 76,707 Increased By 498.6 (0.65%)
KSE30 24,698 Increased By 260.2 (1.06%)
Markets

Oil heads for 6% weekly drop as Delta variant spreads

  • Brent, WTI on track for over 6% weekly decline
  • Surging cases of the Delta variant rekindle demand concerns
  • US dollar strength weighs on prices
Published August 20, 2021

LONDON: Oil prices were down for a seventh straight session on Friday near three-month lows and heading for a weekly loss of over 6% as new lockdowns in countries facing surging cases of the COVID-19 Delta variant dampened the outlook for fuel demand.

Broader investor risk aversion also weighed on oil with the US dollar jumping to a nine-month high on signs the US Federal Reserve is considering reducing stimulus this year.

"The spread of the Delta variant amid moderating economic growth and the prospects of tighter monetary policy are creating short-term ripples in the commodity market," ANZ commodity analysts said in a note.

"Increasing restrictions on mobility are raising concerns for oil demand."

Oil drops below $70 as US urges OPEC+ to pump more

Brent crude futures fell 42 cents or 0.6% to $66.03 a barrel at 1042 GMT, near their lowest since May and down over 6% for the week.

US West Texas Intermediate (WTI) crude futures for September, due to expire on Friday, fell 49 cents or 0.8% to $63.2 a barrel and were down over 7% for the week.

"The latest lockdowns in major economies around the world have likely harmed the economic activities and growth forecasts in the months to come," said Margaret Yang, a strategist at Singapore-based DailyFX.

"Japan has extended its emergency lockdown and confirmed cases are on the rise in countries such as South Korea, Malaysia, Philippines, Vietnam and Thailand, whose industries need oil, which will also be affected by the Delta variant," Yang added.

China has imposed new restrictions with its "zero tolerance" coronavirus policy, affecting shipping and global supply chains, and the United States and China have imposed tit-for-tat flight capacity restrictions.

Oil nears $75 as US inventory drop counters virus concerns

Meanwhile Delta variant outbreaks in Australia and New Zealand have also sparked strict lockdowns.

The approaching end of the US peak gasoline demand season and end of summer holidays in Europe and the United States are also set to sap oil demand.

"Aviation remains the weakest component of global demand at the moment, and the risk of further restrictions on domestic and international travel due to the Delta variant will be a key variable for oil over the remainder of H2, particularly as the US driving season ends," said Stephen Innes, managing partner of SPI Asset Management.

Comments

Comments are closed.