Oil changes course, rising as markets improve

London — Oil prices rose on Friday, reversing some of the previous day’s sharp losses as stock markets strengthened, though gains were capped by the coronavirus situation in major oil consumer India and the restart of a fuel pipeline in the US.

Brent crude oil futures were up 66 US cents, or 1%, at $67.71 a barrel by 9.57am GMT and West Texas Intermediate (WTI) crude was up 63c, or 1%, at $64.45.

The two contracts lost about 3% on Thursday and are on track for their first weekly loss in three.

Global equities rose and the dollar slipped on Friday after US Federal Reserve officials said there would be no imminent move to tighten monetary policy in the world’s biggest economy.

Oil prices have come under pressure this week from surging coronavirus cases in India as well as worries that the highly transmissible variant first detected there is spreading to other countries.

India on Friday reported 343,144 new coronavirus cases, taking its overall tally past the 24-million mark, while deaths from Covid-19 rose by 4,000.

“[Brent’s] renewed failure to exceed $70 is likely to have sparked selling by speculative market participants, especially as operation of the Colonial Pipeline is being ramped up again in the US,” Commerzbank said.

US President Joe Biden reassured motorists that fuel supplies should start returning to normal this weekend, even as more filling stations ran out of petrol across the Southeast nearly a week after a cyberattack forced a shutdown at the nation’s main fuel pipeline.

Colonial Pipeline said late on Thursday that it had restarted its entire pipeline system and had begun deliveries in all of its markets.

Traders were also watching the situation in the Middle East after Israel fired artillery and mounted more air strikes on Friday against Palestinian militants in the Gaza Strip in response to rocket fire deep into Israel’s commercial centre.

Reuters