A more extensive market route, coupled with the new coronavirus outbreaks involving the Delta strain, all raised anxieties regarding the short-term fuel demand outlook.
Brent futures increased 3.46% to $28.09 by 12:26 AM ET (4:26 AM GMT) after dropping 6.8% to an eight-week low on Monday, the most after March 2021. WTI futures surged 3.92% to $24.95.
Global coronavirus outbreaks also proceed to cloud the fuel demand outlook as some countries re-introduce lockdown measures. The number of daily coronavirus cases in the U.K. rose. Notwithstanding the country following most coronavirus restrictions on Monday and urging the U.S. to warn its citizens not to travel to the country.
The Rising Virus Triggers Fears
The amount of cases in Japan’s Olympic village also proceeds to increase, ahead of the Tokyo Olympic Games’ opening ceremony in Jul. 23.
The economic improvement from coronavirus in 2021 marked oil record gains in seven of the past eight months. Nevertheless, new outbreaks of the virus and some countries’ reimposition of limiting measures put a hole in those gains.
OPEC+ resolution of its conflict overproduction increases earlier in the week eliminated some uncertainty for investors. With the supply from August 2021 onwards now settled, the market should contract, and prices increase once again.
Nevertheless, some investors suggested that the extended OPEC+ supply would not be enough to satisfy an imminent supply shortfall. The most advanced coronavirus outbreaks also intimate that the fuel demand outlook will continue unevenly for some time.
Investors now expect U.S. crude oil supply data from the American Petroleum Institute, are set later in the day.