Oil Pares Weekly Gain With Delta Concerns Hanging Over Market

Elizabeth Low
·2 min read

(Bloomberg) -- Oil declined -- trimming a modest weekly gain -- as the fast-spreading delta virus variant continued to cloud the demand outlook.

Futures in New York dropped below $69 a barrel after slipping on Thursday. The latest Covid-19 wave is leading to tighter restrictions on movement across the globe, although there are mixed assessments on its impact. The International Energy Agency reduced its demand forecasts for the rest of the year, while Goldman Sachs Group Inc. predicts only a transient hit to consumption.

See also: Cheap U.S. Oil Being Snapped Up in Asia Despite Delta Lingering

Delta has interrupted oil’s rally after a rapid rebound from the pandemic in big economies such as the U.S. helped drive prices more than 50% higher over the first half of the year. The biggest concern is the flare-up in China, where authorities have taken an aggressive approach to containing the outbreak despite having one of the world’s highest vaccination rates.

“The oil market will likely continue to maintain a nervous watch, especially for a deterioration in China and the U.S.,” said Vandana Hari, founder of energy consultant Vanda Insights. “Yesterday’s IEA report validated fears over a slowdown in second-half demand due to the delta wave.”

Oil’s market structure has also taken a hit from the resurgence. Brent’s prompt timespread was 41 cents a barrel in backwardation -- a bullish signal where near-dated contracts are more expensive than later-dated ones. That compares with 92 cents at the end of July.

Global oil demand “abruptly reversed course” last month, falling slightly after surging by 3.8 million barrels a day in June, the IEA said in its monthly market report on Thursday. The drop in consumption comes as OPEC+ hikes output with a goal to steadily revive all of the production halted during the pandemic.

More stories like this are available on bloomberg.com

Subscribe now to stay ahead with the most trusted business news source.

©2021 Bloomberg L.P.

Our goal is to create a safe and engaging place for users to connect over interests and passions. In order to improve our community experience, we are temporarily suspending article commenting

Recommended Stories

  • Why Virgin Galactic Stock Crashed Today

    As of 12:25 p.m. EDT, the space travel company's stock price was down more than 13%. Morgan Stanley analyst Kristine Liwag cut her rating on Virgin Galactic's stock from equal weight to underweight. With few near-term catalysts to maintain investors' excitement, Liwag sees Virgin Galactic's share price falling to $25 -- or roughly 20% below the stock's closing price on Tuesday.

  • Oil Dips as Traders Weigh Delta’s Impact on Global Demand

    (Bloomberg) -- Oil closed lower as traders assess how the spreading delta variant will impact world fuel demand the rest of the year.Futures in New York posted a 0.2% decline in New York on Thursday after trading little changed for most of the session. Goldman Sachs Group Inc. sees the variant having a transient impact on oil demand. However, the International Energy Agency cut its global oil consumption forecasts “sharply” for the rest of this year and predicted a new surplus in 2022.“The repor

  • Virgin Galactic Stock Is Falling. Space-Tourism Valuation Is Out of This World.

    Morgan Stanley analyst Kristine Liwag cut her rating on Virgin Galactic stock to Sell from Hold. Her price target, however, stays at $25 a share.

  • Buy This Top Cathie Wood Stock Before It Breaks Higher

    This cloud stock is the ninth-largest holding in Wood's ARK Innovation ETF, and it recently became an attractive buy.

  • Stock market news live updates: Stock futures trade mixed, hovering near all-time highs

    Stock futures opened mixed Thursday evening, holding near record levels as investors digested the latest, mixed set of economic data and earnings results.

  • Isaiah Todd with a dunk vs the Brooklyn Nets

    Isaiah Todd (Washington Wizards) with a dunk vs the Brooklyn Nets, 08/12/2021

  • Gold Heads for Second Weekly Loss as Traders Assess Dollar, Fed

    (Bloomberg) -- Gold is heading for a second straight weekly loss as the dollar advances and concerns simmer that the Federal Reserve could soon reduce support for the U.S. economy.The dollar advanced Thursday after U.S. economic reports added to signs of rising inflation pressures and a strengthening job market. A stronger dollar diminishes demand for bullion as an alternative asset.Bullion slid to the lowest since March at the start of the week after a report showed the U.S. labor market recove

  • New York's pension fund to review oil holdings, axes more coal investments

    The third-largest U.S. public pension fund on Thursday said it is launching reviews over climate concerns on $640 million invested in 42 shale oil and gas firms, including ConocoPhillips, Hess and Pioneer Natural Resources. The move by the New York state pension fund comes days after the United Nation's Intergovernmental Panel on Climate Change reported global warming was nearly out of control, and calling its findings "a death knell for coal and fossil fuels." After completing its shale review, the New York fund plans to turn next to oil and gas pipeline and processing investments, it said.

  • Warren Buffett’s Big Bet on EV Batteries Is Finally Paying Off

    Warren Buffett and Tesla have a contentious relationship. After all, the most influential investor of our time has gone on the record saying he would not invest in Elon Musk’s electric vehicle company, despite it being one of the biggest stock market successes of our time. But just because the Oracle of Omaha isn’t bullish […] The post Warren Buffett’s Big Bet on EV Batteries Is Finally Paying Off appeared first on InsideHook.

  • Micron Breaks to the Downside With More Losses Expected

    Trading volume has been active since March suggesting that traders are voting with their feet. The On-Balance-Volume (OBV) line, however, shows a rise for the past year suggesting that buyers of MU have been more aggressive all the way down. If the OBV line is correct then we have to assume there are a lot of unhappy holders of MU right now.

  • White House Calls on OPEC to Increase Oil Production after Curtailing Domestic Drilling

    The average price of gas in the U.S. was $3.186 per gallon as of Tuesday, and stood at $3.143 one month ago, according to AAA.

  • Fast food chains like McDonald's, Starbucks, and Popeyes are taking extra precautions to avoid shortages amid supply chain disruptions and increased sales

    Drive-thru and takeout orders were up over the last year, and fast food chains are facing added pressure.

  • Ford dealers building standalone Bronco stores given free reign

    Ford's born-again Bronco is so popular that about 100 dealers nationwide are planning to build a space dedicated to the off-roader. "That was something that the dealers asked for because they saw the potential for it, so we developed a program for it," explained Mark Grueber, the head of the Bronco brand, in an interview with Ford Authority. There's no one-size-fits-all solution, because each market is different and not all dealers have the same budget to play with.

  • Workers Think They'll Need $500,000 to Retire Comfortably. Are They Right?

    If there were a universal savings figure that guaranteed financial security in retirement, building a nest egg would be a simpler thing to do. Imagine your retirement goals include settling down in a small town, starting a home baking business, and spending time with your nearby grandchildren. Your retirement might cost a lot less than someone who plans to live in a major metro area, go to the theater every week, and travel internationally multiple times a year.

  • Europe Could Face A Natural Gas Crisis This Winter

    Natural gas prices in Europe are soaring as supply from Russia collapses, a collapse that Russia claims is temporary but that shows the power Putin has over his European neighbors

  • Masks and Rules Return to Shanghai Banks Preparing for the Worst

    (Bloomberg) -- A year after becoming the world’s first major financial center to tame the virus, Shanghai is going back on high alert.The fast-moving delta variant outbreak across China forced some global banks and local financial institutions to bring back the containment playbook. Shanghai’s more than 470,000 finance professionals, who have nearly all been back at work and mask-free since the middle of last year, now face regular temperature scans and checks to enable contact tracing. At some

  • Staff at a McDonald's franchise that accused bosses of giving them COVID-19 face masks made of dog diapers have settled their dispute with the owners, a report says

    Workers say bosses at the McDonald's franchise gave them face masks made of dog diapers and coffee filters. The owners deny the accusations.

  • Natural Gas Price Forecast – Natural Gas Continues to Test Big Figure

    The natural gas markets have pulled back a bit during the course of the trading session on Wednesday as the $4.00 level continues to offer a lot of interest.

  • Bitcoin Avoids Bear Market, Long-Term Uptrend Intact

    Resistance near $50,000 to $55,000 could stall the recovery given short-term overbought signals.

  • Oil and gas industry is on the decline in Texas. What does that mean for state’s future?

    A new report challenges tried and true wisdom about what’s good for Texas. “We’re trying to address that misconception that oil and gas is the be all, end all for Texas.”