Oil prices rose on Tuesday after falling sharply in the previous session on concerns over excess supply in the market and worries about a possible drop in energy demand due to rising coronavirus cases.
Benchmark Brent crude rose 68 cents, or 1.6 percent, to $42.40 per barrel, while WTI futures were up 76 cents, or 1.9 percent, at $40.18.
Oversupply issues continue to dog the market as supplies begin to resume in Norway, the U.S. Gulf of Mexico and Libya.
Meanwhile, in its flagship publication, The World Energy Outlook 2020, the International Energy Agency (IEA) forecast a 5 percent fall in global energy demand in 2020.
Oil demand growth is expected to end next decade and will remain vulnerable to economic uncertainties caused by Covid, executive director Fatih Birol said, and added that “without a large shift in government policies, there is no sign of a rapid decline” in oil demand.
“Based on today’s policy settings, a global economic rebound would soon push oil demand back to pre-crisis levels.”
Investors await crude oil supply data from the American Petroleum Institute later in the day for further direction.