Oil prices slip, rebound runs out of steam on demand worries

imageCommodities9 hours ago (Aug 03, 2021 13:00)

© Reuters. FILE PHOTO: A diesel fuel nozzle with new European labels to standardise gasoline pumps in the EU zone is seen at a petrol station in Nice, France, October 12, 2018. REUTERS/Eric Gaillard/File Photo

By Bozorgmehr Sharafedin

LONDON (Reuters) – Oil prices rose on Tuesday on expectation of a further decline in U.S. oil inventories, recouping some losses from the previous session due to lingering concern over rising cases of the Delta coronavirus variant.

Brent, the international benchmark for oil prices, was 29 cents, or 0.4% higher, at $73.18 a barrel, by 1111 GMT.

U.S. West Texas Intermediate (WTI) crude was up 28 cents, or 0.4%, at $71.54 a barrel.

Both markets dropped more than 3% on Monday.

“Some market participants see Monday’s price set-back as a bit exaggerated, considering that we are likely to see another decline in oil inventory this week,” UBS analyst Giovanni Staunovo said.

A preliminary Reuters poll showed U.S. crude and product inventories likely declined last week with both distillates and gasoline stockpiles predicted to have fallen for a third straight week.

Despite recent fluctuations, oil prices are high and healthy, lifting earnings of major oil firms. BP (LON:BP), Conocophillips, Diamondback Energy Inc and Continental Resources Inc reported strong second-quarter profit this week.

Brent has risen more than 40% since the beginning of the year.

However, concerns over the spread of Delta variant in the United States and China, the top oil consumers, kept a lid on the gains.

In China, the spread of the variant from the coast to inland cities has prompted authorities to impose strict measures to bring the outbreak under control.

“Delta related concerns will likely keep oil markets volatile over the coming weeks but at the same time we also see flying activity across Europe and the U.S. continue to grind higher, supporting oil demand,” Staunovo said.

Expectations of a return of Iranian crude to the markets also limited the upside for prices.

Iran’s new president, Ebrahim Raisi, said on Tuesday his government would take steps to lift “tyrannical” sanctions imposed by the United States on its energy and banking sectors.

Iran and six powers have been in talks since April to revive a nuclear pact. But Iranian and Western officials have said that significant gaps remain.

The sixth round of indirect talks between Tehran and Washington adjourned on June 20, two days after Raisi was elected president. Parties involved in the negotiations have yet to announce when the talks will resume.

Oil rises as markets expect further fall in inventories

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

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.


Please enter your comment!
Please enter your name here