Oil prices fell for a second day on Tuesday amid concerns of slow growth in fuel demand as the highly contagious COVID-19 variant Delta imposes new restrictions around the world.
Brent crude futures were down 35 cents, or 0.5%, to $74.33 a barrel as of 0706 GMT, after falling 2% on Monday.
West Texas Intermediate (WTI) crude futures fell 34 cents, or 0.5%, to $72.57 a barrel, extending Monday’s 1.5% loss.
The rise in delta variant cases coincides with the meeting of the Organization of the Petroleum Exporting Countries (OPEC), Russia and its allies on July 1 to discuss the easing of supply restrictions.
OPEC’s demand forecasts show that global oil supply will lag behind demand by 2.2 million barrels per day (bpd) in the fourth quarter, leaving some room for producers to agree to increase production.
The cartel is expected to cut supplies of 250,000 barrels per day as of August. Brent could top out at $80 a barrel next month if the taps don’t open any further.
The favorite summer vacation destinations for Europeans, Spain and Portugal imposed new restrictions on unvaccinated Brits on Monday, while 80% of Australians faced tighter restrictions as the virus flared up across the country.
Travel corridor talks between the US and the UK have also slowed, in part due to concerns about an increase in Delta variant cases in the UK.
Analysts expect OPEC+ to increase supply by around 500,000 barrels in August as the market shrinks due to strong growth in fuel demand in the world’s two largest oil consumers, the US and China.
Investors will look to the latest US inventory data to support that view, as investors expect crude oil stocks to extend their decline into a sixth week.
According to some analysts, US crude inventories are estimated to have dropped by about 4.5 million barrels.
