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Futures Movers: U.S. oil benchmark on track for nearly 8% weekly fall

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Oil futures were lower for a seventh straight day on Friday as worry about the impact on energy demand from the spread of the coronavirus delta variant took a toll.

West Texas Intermediate crude for September delivery
CL.1,
-1.62%

CLU21,
-1.62%

fell 42 cents, or 0.7%, to $63.08 a barrel on the New York Mercantile Exchange. October WTI
CL00,
-1.67%

CLV21,
-1.67%
,
the most actively traded contract, dropped 44 cents, or 0.7%, to $63.25 a barrel, on track for a weekly fall of 7.9%.

October Brent crude
BRN00,
-1.60%

BRNV21,
-1.60%
,
the global benchmark, was down 45 cents, or 0.7%, at $66 a barrel on ICE Futures Europe, on pace for a 6.5% weekly fall.

Crude fell sharply on Thursday, getting caught up in a broad market selloff that saw metals and other commodities tumble along with global equities. U.S. stocks posted a mixed finish, but saw economically sensitive sectors left behind.

The spread of the delta variant “continues to cloud the demand outlook for oil,” said Warren Patterson, head of commodities strategy at ING, in a note. “In addition, output data from China earlier in the week, which showed that Chinese refiners processed the least crude in 14 months, does little to help sentiment.”

Oil futures weren’t helped earlier this week by a larger-than-expected drop in U.S. crude inventories, with investors instead focused on the global demand outlook, and a drop in U.S. gasoline demand just weeks ahead of the end of summer driving season, which ends Labor Day weekend in early September.

The U.S. benchmark is now testing chart support at $63 a barrel, with bears targeting the 200-day moving average near $60 a barrel, said Ipek Ozkardeskaya, senior analyst at Swissquote, in a note.

“The actual mood points at deeper pullback in oil prices, and price recoveries could be interesting top-selling opportunities for those targeting a return to the $60 [a barrel] mark,” the analyst wrote.

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