MELBOURNE- Oil prices fell on Tuesday as optimism for a straightforward recovery in fuel demand faded and a looming increase in supply weighed on the market, with Libya’s state oil company flagging progress on talks to resume exports.
US West Texas Intermediate (WTI) crude futures fell as much as 44 cents, but recovered slightly after stronger-than-expected Chinese factory data.
Brent crude futures for September fell 17 cents, or 0.2 percent, to $41.68 a barrel, paring Monday’s 92-cent gain. The less active August contract, which expires on Tuesday, fell 25 cents after gaining 69 cents on Monday.
Optimism on Monday had been based on strong growth in US pending home sales, bolstering belief that global fuel demand is rising steadily as major economies reopen after coronavirus lockdowns.
But at the same time, coronavirus cases continue to rise in southern and southwestern US states.
“It’s really difficult to say that demand is a one-way street. There are still plenty of risks going both ways,” said Vivek Dhar, mining and energy commodities analyst at Commonwealth Bank of Australia. – Reuters