(C) Reuters. FILE PHOTO: A crude oil tanker is seen at Qingdao Port, Shandong province, China, April 21, 2019. REUTERS/Jason Lee/File Photo
By Bozorgmehr Sharafedin
LONDON (Reuters) -Oil prices rose on Tuesday, recouping some of their losses in the previous session, as rising demand in Europe and the United States outweighed concerns over an increase in COVID cases in Asian countries.
Brent crude was up 64 cents, or 0.9%, at $69.68 a barrel by 1329 GMT, and U.S. oil rose 79 cents, or 1.2%, to $67.27 a barrel.
Both contracts dropped around 2.5% on Monday, but analysts believe the pandemic setback will not last for long.
“This turbulence should remain temporary, not the least as Western world oil demand is back at, or above, pre-pandemic levels and is draining global supplies,” said Nortbert Ruecker, analyst at Swiss bank Julius Baer.
U.S. crude, gasoline, and other product inventories are likely to have dropped last week, with gasoline stocks forecast to fall for a fourth consecutive period, a preliminary Reuters poll showed on Monday. [EIS/S]
Crude oil inventories are expected to have fallen by about 1.1 barrels in the week to Aug. 6, according to the average estimate of six analysts polled by Reuters.
In the United States, the Senate is set to vote on the passage of a $1 trillion infrastructure bill later on Tuesday, which if passed would boost the economy and demand for oil products, analysts said.
Successful vaccination programmes in the West and encouraging economic data come in sharp contrast to rising infections in the East.
In Australia, police are on the streets to enforce COVID-related restrictions, while some cities in China, the world’s top crude oil importer, have stepped up mass testing as authorities try to stamp out a new surge of the virus.
“The lockdowns (in China) could instigate a momentary pause in price action, but as COVID-19 cases are expected to abate quickly given the relatively low number of infections, the downside may be fleeting,” said StoneX analyst Kevin Solomon.
Economic data this week, especially the U.S. Consumer Price Index on Wednesday, will provide guidance on how hard the virus will hit global and regional oil consumption, analysts said.
Oil rises as market shrugs off virus impact
Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.