Oil prices weighed down by weak Asian demand

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Oil prices fell on Tuesday, paring earlier gains, as expectations that major producers will not boost supply any time soon were outweighed by worries over slowing demand amid a spike in the Delta variant of coronavirus infections.

Brent crude was down 51 cents, at $69.00 per barrel while U.S. West Intermediate crude (WTI) slid 52 cents, to $66.77 a barrel.

The prices recovered from losses in early Asia trade after reports that OPEC+, which groups members of the Organization of the Petroleum Exporting Countries and other producers such as Russia, believes oil markets do not need more crude than they plan to release in the coming months.

China’s factory output and retail sales growth also slowed sharply and missed expectations in July, as new COVID-19 outbreaks and floods disrupted businesses.

Hedge funds sold petroleum last week for the sixth time in eight weeks as resurgent coronavirus infections in China, Europe and North America dampened hopes of a rapid resumption in long-distance air travel.

Japan was set to extend its state of emergency in Tokyo and other regions to Sept. 12 and widen curbs to seven more prefectures.

On the supply side, U.S. shale oil output is expected to rise to 8.1 million barrels per day (bpd) in September, the highest since May 2020, according to government data.

Last week, U.S. President Joe Biden’s administration urged the producer group to boost oil output to tackle rising gasoline prices that they see as a threat to the global economic recovery.

But the market ran out of steam mid-session amid concerns over the resurgence in the COVID-19 pandemic.




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