Oil rose on Tuesday, reviving the previous day’s decline, as expectations of declining U.S. crude inventory inventories outweighed fears that the expansion of the Covid-19 variant could erode global economic recovery.
September Brent crude rose 25 cents or 0.3% to $ 75.41 a barrel from 0036 GMT after losing 0.5% on Monday. In August, the gross U.S. West Texas average was $ 74.33 a barrel, up 23 cents or 0.3% from 0.6% the previous day.
“Optimism over tight supply and gross U.S. deposits is helping,” said Toshitaka Tazawak, of Fujitomi Co. a product intermediary analyst, and added that stringent global action has also helped increase risk appetite among investors.
“Still, there is growing concern about a spike in Covid-19 infection cases and uncertainty about OPEC + production plans will limit profits,” he added.
U.S. crude inventories were expected to fall in the eighth consecutive week, and gasoline stocks also declined, a preliminary Reuters poll showed on Monday.
Gross deposits have been steadily declining over the past few weeks, and U.S. inventories have fallen from the lowest week of February 2020 to July 2.
Based on market sentiment, a measure of global equities closed on Monday, as investors looked for signs that the Delta variant of Covid-19 coronavirus could hinder economic growth.
However, reports of infections around the world kept some investors cautious.
The World Health Organization warned that Delta was becoming the dominant variant and that many countries had not yet received sufficient doses of vaccines to ensure health workers.
Meanwhile, OPEC + has yet to make progress in closing divisions between Saudi Arabia and the United Arab Emirates, as they blocked an agreement last week to boost oil production, and OPEC + sources held another policy meeting this week.