Brent crude oil stabilized on Tuesday, near $ 73 a barrel, as investors looked at the risks of the spread of the variable delta coronavirus to global demand.
US West Texas Intermediate crude rose 0.2% above $ 71 a barrel, after falling 3.6% on Monday, the largest loss in two weeks.
A highly contagious delta variant is forcing governments to reset or extend restrictions, and investors are monitoring a slight increase in infections in China, the largest crude oil market in the world, where the government this week advised residents of the capital Beijing not to leave the city.
In Indonesia, Asia’s largest importer of gasoline, the restrictions have been extended in some areas until 9 August, President Joko Widodo said yesterday. Even before this decision, the impact on energy demand was evident, in fuel imports fell by about a quarter, while domestic consumption decreased.
Crude oil rose sharply in the first half as the introduction of vaccines allowed major economies to reopen, increasing demand for oil and draining excess accumulated during the first wave of the pandemic. But the pace of earnings slowed in July as Delta began to pose a greater challenge as the Organization of the Petroleum Exporting Countries (OPEC) moved forward with restoring more production.
Saudi Arabia, Kuwait and the United Arab Emirates, OPEC’s top three oil exporters, boosted crude oil shipments to multi-year highs in July. Currently, the alliance plans to increase collective production by 400,000 barrels per day every month until all production in stall will not be restored.
In China, Delta breached some of the toughest virus defenses in the world, and a total of 61 new cases were counted yesterday, a day after the country experienced the highest number of local infections since the current wave. Those affected were from regions including Hunan, Hubei, Henan, Beijing and Shanghai, according to the National Health Commission.
Somewhere else in Asia, Thailand reported nearly 19,000 new infections.
Over the course of the day, investors will receive a range of indicators on market conditions as BP is expected to present its quarterly results, giving executives a chance to comment on the global outlook. In the United States, the American Petroleum Institute will publish its weekly inventory report.
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