Oil prices rose early on Friday but were still headed for their worst weekly performance since March, depressed by rising COVID cases in many countries and renewed travel restrictions in the world’s largest oil importer, China.
Both benchmarks, however, were down more than 5 percent for the week, the worst showing for oil prices since March this year.
This week, oil settled lower in three consecutive sessions amid fears that the faster-spreading Delta variant would slow fuel demand in China and the rest of Asia. China has reimposed some massive curbs in travel and stopped public transport in several cities as it tries to keep the worst flare-up of COVID since the original outbreak in Wuhan under control. Elsewhere across intensive fuel consumer Asia, Thailand and Malaysia reported record daily new cases on Thursday, the Philippines put its capital Manila on a new lockdown, and Japan reported record new cases in Tokyo. Some experts have called the emergency measures for Tokyo to be expanded nationwide.
While Asia is locking down again, the U.S. and Europe remain open despite the surge in Delta variant cases there, too.
The biggest concern for oil demand right now comes from China and the rest of Asia. China is ordering lockdowns and curbs in travel very early with just several dozen of new daily cases in its attempt to stop the spread. Those lockdowns are affecting millions of people, which could dent fuel demand.
“At least 46 cities have advised against travelling and authorities have suspended flights and stopped public transport. This could impact oil demand as it comes towards the end of the summer travel season,” Reuters quoted ANZ as saying in a report.
By Tsvetana Paraskova for Oilprice.com
More Top Reads From Oilprice.com:
- Do Lithium Batteries Pose A Major Fire Hazard?
- Big Oil Unjustly Under Fire For ‘Dirty’ Hydrogen
- China’s Industrial Slowdown Could Kill The Commodity Rally