Oil prices rose on Tuesday as supply tightened and demand as rising vaccination rates suppressed rising COVID-19 cases worldwide.
Brent crude futures, which rose 0.5% on Monday, gaining 34 cents, or 0.46%, to $74.84 a barrel at 0508 GMT.
West Texas Intermediate (WTI) crude futures, which lost 16 cents on Monday, rose 20 cents, or 0.28%, to $72.11 a barrel.
Oil benchmarks rose despite increased COVID-19 cases in the US and travel warnings announced for Spain and Portugal. There is even talk of wider travel restrictions.
Oil prices are changing this week after recovering all Delta Variant losses from last Monday, volatility has subsided from last week and both contracts look set to continue to consolidate their gains.
Meanwhile, the UK’s lowest daily total of new COVID-19 cases since Monday 4 July happens to be an encouraging sign for fuel demand.
Strong traffic data in most busy areas mean increased infections are having minimal impact. Analysts monitoring mobility data appear to rely on vaccination programs against the new strict quarantines.
Global oil markets are expected to contract, despite the decision by OPEC+ and its allies to increase production for the remainder of the year, starting in August.
Continued restrictions on US shale oil producers are discouraging investors. Investors await official inventory data from the American Petroleum Institute industry group on Tuesday and the U.S. Energy Information Administration on Wednesday to feel more confident on continued demand.
On average, U.S. crude oil inventories estimated fell by about 3.4 million barrels in the week of 23rd July, and gasoline inventories fell by 400,000 barrels.
