Oil rises but set for 5% weekly drop as Delta variant spreads | Reuters

Oil rises but set for 5% weekly drop as Delta variant spreads | Reuters

Oil prices steadied on Friday, clambering away from three-month lows, but they were still on track for a weekly loss of more than 5% 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

"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 futures rose 24 cents or 0.4% to $66.69 a barrel at 0635 GMT, after dropping 2.6% on Thursday to its lowest close since May.

U.S. West Texas Intermediate (WTI) crude futures for September, due to expire on Friday, rose 38 cents or 0.6% to $64.07 a barrel , after sliding 2.7% on Thursday. The more active October contract was up 26 cents at $63.76 per barrel.