TOKYO – Oil climbed on Tuesday, recouping losses from the previous day, as prospects of further decreases in U.S. crude stocks overcame concerns that the spread of COVID-19 variations could derail the global recovery. After dropping 0.5 percent on Monday, Brent crude for September rose 25 cents, or 0.3 percent, to US$75.41 a barrel at 0036 GMT. The price of August West Texas Intermediate crude in the United States was US$74.33 per barrel, up 23 cents, or 0.3 percent, after falling 0.6 percent the day before.
“Optimism over restricted supply and shrinking US crude stockpiles lent support,” said Toshitaka Tazawa, a commodities analyst at Fujitomi Co, who added that bullish global equities also helped improve risk appetite among investors.
“However, mounting fears over an increase in COVID-19 infection cases around the world, as well as uncertainties about OPEC+’s output intentions, would likely restrict gains,” he added.
According to a preliminary Reuters poll released on Monday, oil stockpiles in the United States are likely to fall for the eighth week in a row, while gasoline stocks are also expected to fall.
Crude stockpiles have been slowly declining for several weeks, with inventories in the United States falling to their lowest level since February 2020 in the week ending July 2.
A barometer of global markets closed at a record high on Monday, bolstering market optimism as investors waited for signs that the Delta strain of the COVID-19 coronavirus might stymie economic growth.
Nonetheless, tales of soaring illnesses from around the world made some investors wary.
The World Health Organization cautioned that the Delta variety was growing more prevalent, and that many nations lacked sufficient vaccination doses to protect their health workers.
Meanwhile, OPEC+ has yet to make progress in resolving differences between Saudi Arabia and the United Arab Emirates that hindered a pact to raise oil output last week, OPEC+ sources said, making another policy meeting this week less probable.
(Yuka Obayashi contributed reporting, and Richard Pullin edited the piece.)/n
