Oil prices rose on Tuesday and rose from a three-week low in the previous session. However, gains are likely to remain limited amid rising COVID-19 cases and concerns that restrictions in China will dampen fuel demand.
Brent crude rose 29 cents, or 0.4%, to $69.33 a barrel by 0359 GMT after falling 2.3% on Monday. West Texas Intermediate (WTI) which was down 2.6% in the previous session rose 46 cents, or 0.7%, to $66.94 a barrel.
Some cities in China, the world’s largest importer of crude oil, have stepped up mass testing of the highly contagious Delta variant of the coronavirus in order to see the real aspect of locally transmitted infections.
There is still a lot of uncertainty about how the Covid-19 situation in China will evolve and what this means for oil demand and prices, stronger US dollar is also putting pressure on prices.
Analysts said the US Senate is preparing to vote late on Tuesday to pass a $1 trillion infrastructure bill, which, if passed, would boost the economy and demand for oil products.
Investors are also questioning the recovery in the US amid rising cases.Rising COVID-19 cases are spoiling the outlook for economic growth and overall consumption. US air travel has plateaued for almost two months due to ongoing travel restrictions.
Still, U.S. stockpiles of crude oil, gasoline and other products are expected to drop last week, and gasoline inventories are forecast to fall for the fourth consecutive period.