Crude Oil Futures Rebound, Settle Higher

Despite suffering a setback after a modest uptick at the start, crude oil futures rebounded and settled notably higher on Tuesday, even as traders continued to remain concerned about the outlook for energy demand and possible oversupply in the market.

Surging coronavirus cases and news about some countries resorting to fresh lockdown measures, and the decision of the Organization of the Petroleum Exporting Countries and its allies to increase output from August had pushed down oil prices sharply on Monday.

West Texas Intermediate Crude oil futures for September, the new front month contract, ended up by $0.85 or about 1.3% at $67.20 a barrel.

WTI crude futures contracts for August expired at $67.42 a barrel, gaining $1.00 or about 1.5%. WTI futures for August had closed at a 2-month low on Monday, declining by about 7.5%.

Brent crude futures were up $0.94 or 1.37% at $69.55 a barrel a little while ago.

The demand outlook is weak due to the rapidly spreading delta variant of the coronavirus and fresh restrictions on movements in several countries across the world.

The Delta coronavirus variant is now the dominant strain worldwide, with U.S. officials suggesting local restrictions may have to be re-imposed in response to the pandemic.

The U.S. has warned citizens to not travel to the U.K. and Indonesia amid an increase in infections there.

Traders now look ahead to weekly oil reports from the American Petroleum Institute (API) and U.S. Energy Information Administration (EIA). The API’s report on oil inventory for the week ended July 16th is due later today, while the EIA is scheduled to release its data Wednesday morning.

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