Oil headed for a second weekly gain as signs of tighter supplies helped assuage fears over the resurgent pandemic’s threat to demand.
Futures held above $73 a barrel in New York, up 1.9% this week even as some countries renewed curbs on movement amid a spike in Covid-19, most notably in Southeast Asia. Prices were supported by a further plunge in U.S. crude inventories — the ninth in 10 weeks — and signals that the Federal Reserve will continue measures to support the economy.
There’s confidence the oil market will continue to strengthen, with Royal Dutch Shell Plc chief Ben van Beurden predicting “a strong recovery in demand” as economic activity picks up again.
With prices ending the month little changed, crude’s gains since the start of the year stand at more than 50%. Other commodities have hit their highest levels in a decade.
“Despite the numbers of new cases remaining at a high level, the oil market no longer appears to be viewing the issue of the delta variant with quite the same alarm as it was at the beginning of last week,” said Carsten Fritsch, an analyst at Commerzbank AG in Frankfurt. “The oil market has learnt to live with the virus.”
Original article published by Bloomberg Africa