Oil futures traded lower Tuesday, with weakness attributed to concerns about flare-ups of the Delta variant of the virus that causes COVID-19 potentially sapping fuel demand.
Traders are also keeping an eye on this week’s meetings of officials from OPEC+, the group made up of major producers including the Organization of the Petroleum Exporting Countries and its allies, including Russia.
West Texas Intermediate crude for August delivery fell 50 cents, or 0.7%, to $72.41 a barrel on the New York Mercantile Exchange. September Brent crude, the global benchmark, was off 30 cents, or 0.4%, at $73.84 a barrel on ICE Futures Europe. August Brent declined 32 cents, or 0.4%, to $74.36 a barrel.
The World Health Organization is recommending that fully vaccinated people continue to wear face masks in public, breaking with the guidance offered by the U.S. Centers for Disease Control and Prevention. The WHO is concerned about the rapid spread of the highly infectious delta variant of the virus, with cases rising around the world, leading to renewed travel restrictions.
The OPEC+ decision, expected Thursday, remains the key event, with members expected to further ease output curbs beginning in August by around 500,000 barrels a day.
“Improved economic activity and more traveling should easily absorb the slight change in the OPEC supply, if, however, the post-Covid recovery momentum doesn’t get hurt by another contagion wave,” said Ipek Ozkardeskaya, senior analyst at Swissquote, in a note. “In the short run, we could see a further setback towards the $72-$70 area” for WTI.
Meanwhile, August gasoline futures rose 0.5% to $2.2292 a gallon, while August heating oil was up 0.3% at $2.1282 a gallon.
August natural-gas was up 1.8% at $3.659 per million British thermal units.