Oil steadies in undersupplied market but coronavirus cases weigh | Reuters

Oil steadies in undersupplied market but coronavirus cases weigh | Reuters

Oil prices steadied on Monday after a choppy session as the spread of the COVID-19 Delta variant stoked fears about fuel demand, but losses were limited by forecasts that crude supply will be tight the rest of the year.

Brent crude futures rose 40 cents, or 0.5%, to end the session at $74.50 a barrel, while U.S. West Texas Intermediate crude slipped by 16 cents, or 0.2%, to settle at $71.91.

Early in the session, both benchmarks fell by more than $1 a barrel.

“Risk appetite has clearly massively improved over the last week and just like other risk assets, oil is taking a breather ahead of an intense few days,” Craig Erlam, senior market analyst at OANDA said.

“The second quarter recovery has got pulses racing at the prospect of what’s to come. The next wave of COVID is a downside risk to that but not to the extent that the previous surges have. Optimism is still strong and for good reason.”

Coronavirus cases kept rising over the weekend, with some countries reporting record daily increases and extending lockdown measures. China, the world’s largest crude importer, has also registered a rise in COVID-19 cases.