Oil rose in early trade on Tuesday paring sharp overnight losses, as the tropical storm that is latest in the Gulf of Mexico lost strength, but worries about gas demand persisted with flare-ups around the globe in coronavirus cases.
U.S. West Texas Intermediate (WTI) crude futures (CLc1) for, due to expire on Tuesday, rose 26 cents, or 0.7%, to $39.57 a barrel at 0224 GMT october. The more November that is active agreement 15 cents, or 0.4%, to $39.69.
Brent crude futures (LCOc1) rose 13 cents, or 0.3%, to $41.57 a barrel.
Crude prices started initially to recover as Texas refineries stayed available despite forecasts of hefty flooding, with Tropical Storm Beta expected to help keep strength that is losing allaying worries about U.S. refinery interest in feedstock.
Both oil benchmarks fell around 4% on Monday, hit by rising concerns that the increase in coronavirus cases in major areas could spur lockdowns that are fresh hurt demand. That raised the chance that Libyan oil could return when it’sn’t needed.
“We had a pretty risk-off that is punchy (overnight) … on fears around the danger that the COVID resurgence begins to have negative impacts on demand again,” said Lachlan Shaw, nationwide Australia Bank (OTC:NABZY)’s head of commodity research.
Markets are nervous about demand in places like the UK, where limitations that are fresh being imposed. U.S. health officials are also warning of a new wave in the winter that is coming.
“When the virus resurges, governments lock down, impose restrictions, and individuals and businesses start to retreat. It’s all bad for demand,” Shaw said.
Traders are going to be viewing out for the American Petroleum Institute’s data on U.S. oil inventories due later on Tuesday.
U.S. oil that is crude gas stockpiles likely dropped last week, while inventories of distillates, including diesel, were seen climbing. Oil rose in early trade on Tuesday paring sharp overnight losses.