SINGAPORE, July 26 (Reuters) – Oil prices changed slightly on Monday as investors balanced fuel demand concerns over the spread of COVID-19 versions and floods in China with expectations of close supply by the end of the year.
Brent crude futures fell 3 cents to $ 74.07 a barrel by $ 0153 GMT, while U.S. Texas intermediate crude was $ 71.99 a barrel, down 8 cents.
Both contracts recovered last Monday after a 7% decline and made their first profit in 2-3 weeks last week as investors bet that demand will remain strong due to declining oil stocks and rising vaccination rates.
“Last Monday, we noticed an overreaction in the market and like all other technical corrections so far, the decline in oil has usually proved short-lived,” said Howie Lee, an economist at Singapore’s OCBC Bank.
“Bargain hunters multiplied when Brent fell below $ 70 and economic energy demand looks strong.”
However, coronavirus cases continued to increase over the weekend, with some countries recording record daily increases and extending blocking measures that could slow oil demand. In China, the world’s largest importer of crude oil, the number of COVID-19 cases has risen, while the country has been battling severe floods and typhoons in the central and eastern parts of the country. read more
Even Beijing’s repression of abuse of import quotas combined with the impact of high crude oil prices could fall to its lowest growth rate in oil decades in two decades, despite the expected rise in refining rates in the second half of 2021. read more
However, expectations of close care support prices.
Global oil markets are expected to remain in deficit despite the decision of the Organization of the Petroleum Exporting Countries and their allies to raise production by the end of the year.
The chances of a quick return of Iranian supplies are diminishing as talks on reviving the 2015 nuclear deal are pushed back to August. Meanwhile, the U.S. is considering suppressing Iranian oil sales to China, as it advocates that Tehran may not return to nuclear talks or take a tougher stance whenever that happens, a U.S. official said. read more
In the US, the recovery in oil drilling has been modest as producers have limited consumption. U.S. oil rigs rose seven to 387 last week, the highest since April 2020, energy services company Baker Hughes Co. (BKR.N) said Friday.
Reporting Florence Tan; Edited by Ana Nicolaci da Costa
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