Oil bounces back as market takes advantage of lower prices

NEW YORK, July 20 (Reuters) – Crude oil futures rebounded on Tuesday as market participants competed to take advantage of the two-month low in oil hit in the previous session.

Monday’s liquidation, spurred by fears of demand destruction amid rising COVID-19 cases, lowered oil by about 7% and hit other riskier assets. The oil market was also down following news that the Organization of the Petroleum Exporting Countries and its allies, known as OPEC +, had reached a deal to increase supply in the coming months. Read more

“There are bottom pickers trying to get into this drop,” said Bob Yawger, director of energy futures at Mizuho in New York City.

Brent crude rose 73 cents, or 1.1%, to $ 69.35 a barrel after slipping 6.8% on Monday. The global benchmark fell from its high above $ 77 reached in early July – its highest since late 2018.

U.S. crude ended up $ 1, or 1.5%, at $ 67.42 on its last day of trading, after hitting a low of $ 65.21 on Tuesday. The contract fell 7.5% on Monday.

The expiration adds volatility to the market, Yawger said. The following month, September, rose 94 cents, or 1.4%, to $ 67.29.

Still, the market was skeptical about how long the price hike lasted.

“It’s hard to see prices come back unless the nervousness of the virus is brought under control,” said Stephen Brennock of oil broker PVM. “The market is clearly uncertain about the outlook for demand.”

The Delta coronavirus variant has become the dominant strain around the world, US officials said on Friday. Read more

The variant is unlikely to jeopardize the resumption of global growth, although it may cause “regional hiccups,” said Carsten Menke, analyst at Julius Baer.

Crude inventories in the United States are expected to post a ninth straight week of decline this week. Industry data was due at 4:30 p.m. EDT (8:30 p.m. GMT), followed by government figures on Wednesday.

OPEC, meanwhile, expects global oil demand to increase 6.6% in 2021.

Additional reporting by Aaron Sheldrick and Alex Lawler Editing by David Goodman and Mark Heinrich

Our Standards: Thomson Reuters Trust Principles.