Oil was down Monday morning in Asia. The black liquid extended its steep losses from the previous week as the latest restrictive measures to curb the latest outbreaks of COVID-19 globally sustain concerns about fuel demand.
“Concerns about potential global oil demand erosion have resurfaced with the acceleration of the Delta variant infection rate,” RBC analyst Gordon Ramsay said in a note.
New restrictions in place in China, the world’s top oil importer, to curb the country’s latest COVID-19 outbreak also damped the fuel demand outlook.
They include flight cancellations, travel advisories in 46 cities and limited public transportation services in 144 areas.
“While the number of cases in China is low, it comes just as the summer travel season peaks… this has overshadowed signs of strong demand elsewhere,” ANZ commodity analysts said in a note.
A strengthening dollar, thanks to Friday’s better-than-expected U.S. jobs report spurring bets that the U.S. Federal Reserve would begin asset tapering earlier than expected, also added to oil’s woes. Non-farm payrolls rose by 943,000 and the unemployment rate declined to 5.4% in July.
The Organization of the Petroleum Exporting Countries (OPEC) will release its monthly Oil Market Report on Thursday.