Oil drops as COVID-19 surges threaten fuel demand outlook | Reuters

Oil drops as COVID-19 surges threaten fuel demand outlook | Reuters

Oil prices dropped for a second day on Tuesday on worries about slower fuel demand growth as outbreaks of the highly contagious Delta variant of coronavirus sparked new mobility restrictions around the world.

Brent crude futures fell 67 cents, or 0.9%, to $74.01 a barrel by 0901 GMT, after slumping 2% on Monday.

U.S. West Texas Intermediate (WTI) crude futures fell 83 cents, or 1.1%, to $72.08 a barrel, extending a 1.5% loss on Monday.

Despite the virus flare-up, the market still broadly expects vaccine rollouts to brighten the demand outlook, analysts said.

"The narrative of the past few months has not changed: the war against the virus is being gradually won, the global economy and oil demand are recovering," said PVM Oil analyst Tamas Varga.