You are here: Home » Markets » News
Business Standard

Oil cools off highs as leaders' comments reignite Covid-19 fears

Brent still trading near three-year high; WTI set for ninth weekly gain

Topics
Oil Prices | Brent oil

Jessica Resnick-Ault | Reuters 

Photo: Bloomberg
Photo: Bloomberg

Oil traded just below multi-year highs on Friday as Germany's chancellor and the US Federal Reserve chairman said that demand disruptions from Covid-19 may not be over.

Brent crude futures rose 76 cents, or 0.89%, to $85.36 a barrel at 2:14 p.m. EST (1714 GMT) after Thursday's three-year high of $86.10. The benchmark is set for its seventh weekly gain.

U.S. West Texas Intermediate (WTI) crude futures gained $1.13, or 1.4%, to reach $83.63 a barrel, not far off a seven-year high hit this week. The grade is heading for its ninth weekly rise.

"Supply is still very, very tight, the market is just cautious about the possibility of an uptick in COVID cases in Russia, China and now Germany," said Phil Flynn, senior analyst at Price Futures Group in Chicago.

Prices pulled back from earlier intraday highs after German Chancellor Angela Merkel said the pandemic is not yet over.

US Federal Reserve Chairman Jerome Powell said he could not rule out another COVID spike this winter.

Prices have been boosted by worries about coal and gas shortages in China, India and Europe, spurring some power generators to switch from gas to fuel oil and diesel.

Winter weather in much of the United States is expected to be warmer than average, according to a National Oceanic and Atmospheric Administration forecast.

US crude found support this week as investors eyed low crude stocks at the US storage hub in Cushing, Oklahoma.

US Energy Information Administration data on Wednesday showed crude stocks at Cushing fell to 31.2 million barrels, their lowest level since October 2018.

"America’s gasoline demand appears to be experiencing an Indian summer," PVM analysts said in a note, pointing to the highest implied demand for this time of year since 2007 despite high pump prices.

Dear Reader,


Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.
We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor

First Published: Sat, October 23 2021. 01:41 IST
RECOMMENDED FOR YOU
.