Oil is down on Tuesday after making profits following the sharp gains from previous sessions.
Libya’s state oil company may increase supply by signaling progress in export talks.
The more-active Brent crude futures for September LCOc2 fell 24 cents, or 0.6%, to $41.61 a barrel by 06:10 GMT, paring Monday’s 92 cent gain. The August contract LCOc1, which expires on Tuesday, fell 24 cents to $41.47.
WTI crude CLc1 was down 33 cents, or 0.8% at $39.37 a barrel.
The contracts of both crude oil benchmarks were modestly withdrawn after making profit.
Although ‘overnight’ is an impressive one-night period of time, it should be noted that the oil markets are not trend trading but range trading.
Cases of coronavirus continue to increase in the southern and southwestern US states, but strong growth in real estate sales in the US supports some optimisms that global fuel demand is on the rise.
It is hard to say that the increase in demand is the only factor and remedy. There are still many risks in both directions. However, it should not be stopped looking for signs of recovery in demand.
Analysts expect US crude oil stocks to drop from record levels last week, and interpret a fall in gasoline stocks for the third week as a positive sign.
On the supply side, investors have been watching since January whether Libya, which can produce about 1% of its global oil supply, can continue its exports under a blockade of a civil war.
Libya’s National Oil Company (NOC) said on Monday that progress has been made in talks on the removal of the blockade with neighboring countries.
The weak Japanese industrial production sector strengthened the possibility of a rough improvement in fuel demand based on market valuation.
However, due to the help of Chinese factory data stronger than expected and Iraq’s support in oil export cuts in June prevented larger losses.