Oil prices were steady on Monday as the spread of the COVID-19 Delta variant stoked fears over future fuel demand, though crude supply looks set to be tight through the rest of the year.
Brent crude futures for September were up 4 cents at $74.14 a barrel by 1342 GMT while US Texas Intermediate crude slipped by 11 cents to $71.96.
Read the latest updates in our dedicated coronavirus section.
Both benchmarks fell by more than $1 a barrel in earlier trading.
Coronavirus cases continued to rise over the weekend, with some countries reporting record daily increases and extending lockdown measures that could slow oil demand. China, the world’s largest crude importer, has also registered a rise in COVID-19 cases.
For the latest headlines, follow our Google News channel online or via the app.
Furthermore, Beijing’s crackdown on the misuse of import quotas combined with the impact of high crude prices could send growth in China’s oil imports to its slowest in two decades this year despite an expected rise in refining rates in the second half.
“The Delta variant is still spreading and China has started to clamp down on teapots, so their import growth would not be that much,” said Avtar Sandu, a senior commodities manager at Singapore’s Phillips Futures, referring to independent refiners.
Strong US demand and expectations of tight supplies have helped both contracts to recover from a 7 percent slump last Monday to mark their first gains in two to three weeks last week.
Global oil markets are expected to remain in deficit despite a decision by the Organization of the Petroleum Exporting Countries (OPEC) and allies, collectively known as OPEC+, to raise production through the rest of the year.
“There is seemingly a battle within the energy complex between the prevailing supply deficit engineered by OPEC+ and the threat of the COVID-19 Delta variant in regions with low vaccination rates,” said StoneX analyst Kevin Solomon.
“The slow take-up of vaccinations will continue to limit some upside in oil demand in those regions, and there will be intermittent spells in the recovery in the coming months.”
- Gulf rebound seen as Saudi Arabia, UAE to top 4pct growth in 2022: Reuters survey
- Iraq, France’s Total to develop natural-gas field, boost oil output
- Iraq to sell Lebanon 1 million tons of heavy fuel oil
- US mulls crackdown on Chinese imports of Iranian oil
- Barclays raises this year’s oil price forecast by $3-5 per barrel
- Russia’s Lukoil may reduce its stake at Iraqi West Qurna-2 oil field, says CEO
- Iran opens new oil export terminal bypassing Strait
- Oil falls sharply by $2 after OPEC+ producers agree to raise output