Oil rises but COVID-19, supply concerns cloud outlook

SourceZawya
SectorHealthcare
CountryGulf

TOKYO – Oil edged up towards $69 a barrel on Tuesday as a tight physical market offset some of the COVID-19 and OPEC+ supply concerns behind the previous session’s 7% slide. In a sign of tight supply, crude inventories in the United States are expected to fall for a ninth week. EIA/S OPEC expects world oil demand to grow by 6.6% in 2021 with the expansion focused on the second half of the year.

“Global demand still appears to be recovering dynamically, so the oil market should end up in supply deficit in the coming months despite the production hikes to be implemented by OPEC+,” said Eugen Weinberg of Commerzbank. Brent crude gained 22 cents, or 0.3%, to $68.84 a barrel by 1125 GMT, having slid by 6.8% on Monday. U.S. crude for August, which expires later on Tuesday, was up 21 cents, or 0.3%, at $66.63 after falling 7.5% on Monday. The September U.S. crude contract was down 0.2% at $66.21. Monday’s selloff, which pushed oil to a two-month low and hit other risk assets, such as equities, was driven by concern that rising COVID-19 infections could cause demand to weaken again just when OPEC+ has decided to increase

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