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U.S. crude oil futures edged up on Friday, but remained on track for their biggest weekly decline since late October on demand concerns as top consumers impose travel restrictions to curb the spread of the COVID-19 Delta variant.

However, rising tensions in the Middle East provided a floor under the market.

U.S. West Texas Intermediate (WTI) crude futures have dropped 6.4% this week, the biggest weekly loss since the end of October. Thy were up 10 cents at $69.19 a barrel, as at 0400 of GMT.

Brent crude oil futures have given up 6.5%, the most since March and prices were up 11 cents at $71.40 a barrel on Friday.

“The price action we see now is really a function of the macro picture,” said Howie Lee, an economist at Singapore’s OCBC bank.

“The Delta variant is now really starting to hit home and you see risk aversion in many markets, not just oil.”

Japan is poised to expand emergency restrictions to more prefectures while China, the world’s second-largest oil consumer, has imposed curbs in some cities and cancelled flights, threatening fuel demand.

“At least 46 cities have advised against travelling, and authorities have suspended flights and stopped public transport. This could impact oil demand as it comes towards the end of the summer travel season,” ANZ said in a report.

Daily new COVID-19 cases in the United States have climbed to a six-month high.

However, worries over rising tensions between Israel and Iran limited the decline in prices.

 

“In the short-term oil prices are likely to be stuck in a range-bound environment,” CMC Markets analyst Kelvin Wong said, with WTI trading between $66.30 and $75.70 per barrel.

He said that oil’s upside has also been capped by improving crude supplies in the United States while non-farm payroll data due later on Friday has lent a cautious air to trading.

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