Oil prices extended gains on Friday, but continued their biggest weekly drop since March as travel restrictions to curb the spread of the COVID-19 Delta variant raised concerns over fuel demand.
Brent crude futures rose 47 cents to $71.76 at 0640 GMT, while US West Texas Intermediate (WTI) crude futures rose 45 cents to $69.54 a barrel.
Both contracts are down 6% this week, the highest level and biggest weekly loss since March.
The price action seen is really a result of the macro image. The Delta variant is starting to wreak havoc and trigger reluctance in many markets, not just oil.
As China, the world’s second-largest oil consumer, imposes restrictions in some cities and threatens fuel demand by canceling flights, Japan is poised to expand its emergency restrictions to include more provinces.
Authorities advise to suspend flights, stop public transport, not to travel. This could affect oil demand as the end of the summer travel season approaches.
New daily cases of COVID-19 in the United States hit a six-month high.
However, concerns that tensions between Israel and Iran would escalate limited the decline in prices. Therefore, oil prices are likely to be stuck at a targeted level in the short term.
