Oil heads for 7% weekly drop as Delta variant spreads | Reuters

Oil heads for 7% weekly drop as Delta variant spreads | Reuters

Oil prices were down for a seventh straight session on Friday near three-month lows and heading for a weekly loss of over 7% as new lockdowns in countries facing surging cases of the COVID-19 Delta variant dampened the outlook for fuel demand.

Broader investor risk aversion also weighed on oil with the U.S. dollar jumping to a nine-month high on signs the U.S. Federal Reserve is considering reducing stimulus this year. read more (.DXY)

"The spread of the Delta variant amid moderating economic growth and the prospects of tighter monetary policy are creating short-term ripples in the commodity market," ANZ commodity analysts said in a note.

"Increasing restrictions on mobility are raising concerns for oil demand."

Brent crude fell 69 cents, or 1%, to $65.76 a barrel by 1338 GMT, near its lowest since May and down almost 7% for the week.

U.S. West Texas Intermediate (WTI) crude for September, due to expire on Friday, fell 68 cents, or 1.1%, to $63.01 a barrel and was down almost 8% for the week.

"The latest lockdowns in major economies around the world have likely harmed the economic activities and growth forecasts in the months to come," said Margaret Yang, a strategist at Singapore-based DailyFX.