Oil prices remained stable on Tuesday, with investors expecting that tight supply and increased vaccination rates will help offset any demand impact from the global outbreak of COVID-19. At 0128 GMT, Brent crude futures were up 13 cents, or 0.2 percent, to $74.63 a barrel, extending a 0.5 percent rise on Monday. After losing 16 cents on Monday, US West Texas Intermediate (WTI) oil futures rose 4 cents to $71.95 a barrel. Even after the US issued travel warnings to Spain and Portugal due to increased COVID-19 cases, benchmark prices surged, with a White House official telling Reuters that further travel restrictions will not be relaxed due to the highly virulent Delta form and rising domestic illnesses.
Analysts watching mobility data are optimistic about gasoline demand, relying on vaccinations to prevent further restrictions. Despite an agreement by the Organization of Petroleum Exporting Countries and its partners, collectively known as OPEC+, to raise output for the rest of the year, global oil markets are projected to stay in deficit.“Robust road traffic data across most key locations implies increased illnesses are having negligible impact,” according to ANZ Research analysts.
”Investors are also pleased by US shale oil producers’ ongoing prudence. So far, they’ve maintained discipline, focusing on returns rather than growth, according to ANZ Research analysts.
Investors will be looking for inventory data from the American Petroleum Institute on Tuesday and the United States Energy Information Administration on Wednesday to see if demand is holding up. In the week ending July 23, five analysts polled by Reuters projected those U.S. crude stocks declined by approximately 3.4 million barrels while gasoline stocks fell by 400,000 barrels on average.
