Oil heads for 6% weekly drop

Oil heads for 6% weekly drop

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.

"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."

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.

U.S. 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.

Investors concerned about economic growth are looking ahead to the Federal Reserve Chair Jerome Powell's comments at the Jackson Hole symposium next week. They are bracing to hear more about its timeline for tapering and easing of economy-stimulating policies.

"Regardless of Fed tapering timing, growth is only getting pushed further out, but given the excessive froth in the market a pullback seems warranted," Edward Moya, senior market analyst at Oanda, said in a note.

He added that the Fed's stimulus measures would not disappear overnight and markets would therefore continue to be supported in the coming months.

"Investors should not expect a similar 2013 taper tantrum, but a modest stock market pullback that will likely be bought into," Insider cited him as saying.

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