Oil prices slide due to Delta variant concerns
Oil prices dipped on Tuesday morning due to weakened fuel demand concerns after a surge in Covid-19 delta variant infections has resulted in travel restrictions being implemented around the world.
One barrel of European reference oil Brent traded for USD 74.27 on Tueday morning against USD 75.45 on Monday afternoon. US benchmark crude West Texas Intermediate sells concurrently for USD 72.53 against USD 73.43.
The Organization of Oil Exporting Countries and their OPEC+ allies, which include Russia, will hold a meeting on Thursday this week to discuss easing caps on the cartel's oil output.
According to Reuters, OPEC+ foresees global oil supply to lag behind demand with 2.2 million barrels per day in Q4 this year, thereby giving oil producers some leeway to reach an agreement about a possible supply boost.
"Oil prices fell on concerns that OPEC+ will decide to meaningfully boost output later this week just as the Delta variant of the coronavirus spreads," says Commonwealth Bank Commodities Analyst Vivek Dhar in a note, as cited by the news agency.
Reuters reports analysts saying the OPEC+ wants to raise output by roughly 500,000 bpd because increasing demand from the US and China has eaten into supply.
On Monday, Spain and Portugal imposed travel restrictions on unvaccinated UK residents, while 80 percent of Australians face the same measures due to rising infection numbers.
The delta variant has also slowed down talks between the US and UK about opening a travel corridor, reports Financial Times, according to Reuters.
US crude inventories are expected to abate for the sixth consecutive week, shows a Reuters poll that also indicates a fall in domestic gasoline stockpiles.
Sector lobby American Petroleum Institute forecasts a decrease of 4.5 million barrels of oil.
US inventory data will be published Wednesday at 4 p.m. CET by the US Energy Information Administration.
English Edit: Daniel Frank Christensen
Oil rally continues as markets await OPEC+ meeting outcome
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