NEW YORK (Reuters) - Oil prices closed out their biggest week of losses in more than nine months with another down day on Friday, as investors sold futures in anticipation of weakened fuel demand worldwide due to a surge in COVID-19 cases.
The crude market has now posted seven consecutive days of losses. Numerous nations worldwide are responding to the rising infection rate due to the coronavirus Delta variant by adding travel restrictions to cut off the spread.
China has imposed stricter disinfection methods at ports, causing congestion, nations including Australia have ratcheted up travel restrictions, and global jet fuel demand is softening after improving for most of the summer.
“It’s hard for prices to find support with this kind of uncertainty,” said John Kilduff, partner at Again Capital LLP in New York.
Brent crude fell 8% on the week, settling down $1.27, or 1.9%, to $65.18 a barrel, its lowest since April and down about 8% for the week. U.S. West Texas Intermediate (WTI) crude for September settled down $1.37, or 2.2%, to $62.32 a barrel on Friday, to lose more than 9% for the week.
China, the world’s largest crude importer, has imposed new restrictions with its “zero tolerance” coronavirus policy, which is affecting shipping and global supply chains. The United States and China have also imposed flight-capacity restrictions.
“They are acting severely for minimal outbreaks, which is a direct threat for the demand profile there,” Kilduff said.
Several U.S. companies have delayed return-to-office plans. Apple Inc, the largest U.S. company by market value, is delaying the return of its workers until early 2022, Bloomberg reported.
The U.S. dollar hit a nine-month high on signs the U.S. Federal Reserve is considering reducing stimulus this year. Oil prices move inversely to the U.S. currency, making oil more expensive for foreign purchasers when the dollar rallies.