Crude oil prices extended gain on Tuesday after posting the sharpest increase in five months as demand concerns eased following China’s success in stamping out the resurgence in COVID-19 infections. The international benchmark Brent for October delivery jumped $2.47 to $71.22 per barrel at 20:46 GMT after touching $71 for the first time since August 12. Meanwhile, US WTI for October rose $2.01 to $67.65 per barrel.
China’s draconian measures have rapidly brought daily COVID-19 cases down to zero, with road traffic showing signs of recovery. The country’s Ningbo port, one of the busiest globally, also reopened after a two-week suspension. Adding support to prices was a fire on a Mexican oil platform which reduced the country’s daily output by more than 400,000 bpd, a similar volume that OPEC+ plans to add next month.
Data from the American Petroleum Institute showed that US crude inventories fell by 1.622 million last week, while gasoline stocks decreased by nearly 1 million. API also reported a 245,000-barrel drop in distillate stocks.
Despite the progress in battling against the Delta variant, hurdles are still looming to restore demand. Chinese airlines plan the fewest flights since February this month, a private survey showed. In Malaysia, rising infections are threatening to further tighten the supply of semiconductors and other components that have hit carmakers for months.
