Oil prices fell for a second consecutive day early on Friday, hit by weakening demand estimates and China closing a key terminal at the third-busiest port in the world.
As of 8:49 a.m. EDT, the U.S. benchmark WTI Crude was down 0.41% at $68.79 and Brent Crude traded down 0.32% at $71.08.
Oil extended the losses from Thursday when prices were hit by a warning from the International Energy Agency (IEA), which said that new mobility restrictions in Asia to fight the Delta variant are set to slow global oil demand growth in the second half of 2021.
"Growth for the second half of 2021 has been downgraded more sharply, as new Covid-19 restrictions imposed in several major oil consuming countries, particularly in Asia, look set to reduce mobility and oil use," the IEA said in its closely-watched Oil Market Report published on Thursday.
On Friday, oil prices suffered from concerns about disruptions in global shipping and supply chains after China shut down a key terminal at its Ningbo-Zhoushan port, the third-busiest port in the world, after one port worker contracted COVID-19.
"The macro-economic outlook remains clouded by the current third Covid-19 wave which continues to spread across Asia and parts of the US, thereby creating a great deal of uncertainty with regard to the short-term demand for key growth and demand-dependent commodities from crude oil and gasoline to copper and iron ore," Ole Hansen, Head of Commodity Strategy at Saxo Bank said in a commodity weekly commentary on Friday.
Two weeks into trading in August, crude oil stays one of the biggest losers among commodities. Only the prices of iron ore and silver have lost more than crude so far this month, Hansen said.
"Following several months where the main focus was on OPEC+ and its ability to support prices by keeping the market relatively tight, the focus has once again reverted to an uncertain demand outlook caused by the rapid spreading of the Delta coronavirus variant, particularly in key importer China," he added.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews. More