Crude oil prices are set for their largest weekly surge this week as investors turn their focus on the outlook for US stimulus. Federal Reserve Chair Jerome Powell, in a speech on Friday, signalled a scale-back in the central bank’s bond purchases. Investors are also monitoring closely the situation regarding Tropical Storm Ida. The National Hurricane Center forecast Ida would make landfall in New Orleans at least as a Category 2 hurricane. BP, Shell, and other oil producers have already begun shutting their production in the US Gulf of Mexico.
On the other hand, the fast-spreading COVID-19 delta variant is still weighing on demand. Some countries continued keeping restrictions in place to curb the virus spread. Meanwhile, OPEC+ is due to meet next week after agreeing to raise supply by 400,000 bpd each month until all of its curbs are lifted. Nonetheless, market participants will be watching for any revision to OPEC+ guidance.
Futures in New York climbed toward $68/barrel and are up nearly 9% for the week, the largest since February, despite a retreat on Thursday. The prompt time spread for Brent widened from 38 cents/barrel on Monday to 93 cents/barrel on early Friday.
