(Bloomberg) — Oil steadied after a two-day decline as investors assessed a demand outlook clouded by the comeback of Covid-19 in many regions.
Futures traded above $68 a barrel in New York after sliding more than 2% over the past two sessions. While there are pockets of robust demand emerging in some regions including Europe, the fast-spreading delta virus variant has resulted in renewed lockdowns in other areas. A stronger dollar has also made commodities priced in the currency more expensive.
Oil’s sizzling rally from the depths of the pandemic has been interrupted as the spread of delta curbed fuel consumption. However, China, the world’s largest oil importer, has managed to contain its outbreak of the variant, and there are expectations that the market will tighten through the end of the year.
The prompt timespread for was 64 cents a barrel in backwardation — a bullish structure where near-dated contracts are more expensive than later-dated ones. That compares with 60 cents on Monday.
Covid-19 infections jumped to a one-year high in Singapore and the city-state isn’t ruling out re-imposing restrictions, while the Philippines has backtracked on easing curbs in the capital region. In the U.S., the death toll topped 650,000, although three-quarters of adults have now taken at least one vaccine dose.
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