(Bloomberg) — Oil steadied above $71 a barrel as investors weighed the risk to consumption posed by the spread of the delta coronavirus variant.
West Texas Intermediate was 0.3% higher in Asian trading after slumping 3.6% Monday, the biggest loss in two weeks. The highly infectious Covid-19 variant is forcing governments to reimpose or extend some curbs, and investors are tracking an uptick in cases in the world’s biggest crude market China.
In Indonesia, the biggest gasoline importer in Asia, restrictions have been extended in some regions until Aug. 9, President Joko Widodo said late on Monday. Even before that decision, the impact on energy demand was clear as imports of motor fuel fell by about a quarter, while local usage dwindled.
Crude rallied strongly in the first half as the roll-out of vaccines allowed major economies to reopen, boosting oil demand and draining the glut built up during the initial wave of the pandemic. The pace of gains slowed in July as delta began to pose a greater challenge, while the Organization of Petroleum Exporting Countries pushed ahead with restoring more output to the market.
Saudi Arabia, Kuwait and the United Arab Emirates, three core OPEC oil exporters in the Middle East, boosted crude shipments to multimonth highs in July. At present, the alliance plans to raise collective output by 400,000 barrels a day each month until all of its halted production has been revived.
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