· Oil climbs on expected further draw in U.S. crude inventories
Oil prices climbed on Tuesday, reversing most of the previous day’s losses, as tight supply and expectations of a further draw in U.S. crude inventories provided support, although fears over the spreading COVID-19 variant capped gains.
Brent crude for September rose 36 cents, or 0.5%, to $75.52 a barrel by 0655 GMT, after losing 0.5% on Monday. U.S. West Texas Intermediate crude for August was at $74.45 a barrel, up 35 cents, or 0.5%, having fallen 0.6% the previous day.
“Optimism about tight supply and declining U.S. crude stockpiles lent support,” said Toshitaka Tazawa, an analyst at commodities broker Fujitomi Co.
U.S. crude inventories were expected to fall for an eighth consecutive week, while gasoline stocks also declined, a preliminary Reuters poll showed on Monday.
Crude stockpiles have declined steadily for several weeks, with U.S. inventories falling to the lowest since February 2020 in the week to July 2.
· OPEC+ impasse risks price war as demand surges, says IEA
Stalled talks by top oil producers over releasing more supply could deteriorate into a price war just as COVID-19 vaccines are sending demand for oil surging, the International Energy Agency (IEA) said on Tuesday.
"The possibility of a market share battle, even if remote, is hanging over markets, as is the potential for high fuel prices to stoke inflation and damage a fragile economic recovery," the Paris-based agency said.
"The OPEC+ stalemate means that until a compromise can be reached, production quotas will remain at July's levels. In that case, oil markets will tighten significantly as demand rebounds from last year's COVID-induced plunge," it added in its monthly oil market report.
A spat between Saudi Arabia and the United Arab Emirates forced OPEC+, which groups producers from the Organization of the Petroleum Exporting Countries, Russia and others, to abandon talks last week on boosting production after days of negotiations.
Reference: Reuters, CNBC
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