Crude oil priced drifted lower on Tuesday after moving around the flat line for much of the day’s session till noon with traders weighing demand prospects and looking ahead to weekly inventory data.
Signs of tight supply and improving vaccination rates offset worries about the spread of the delta variant coronavirus and supported crude prices a bit early on in the day.
Traders continue to believe that overall supply will fall short of expected demand despite a decision by the OPEC and its allies, collectively known as OPEC+, to raise production through the rest of the year.
It is expected that rising vaccination rates will help offset any negative impact on demand due to surging COVID-19 cases worldwide.
Still, traders stayed wary of building up long positions, presumably on concerns energy demand could drop in the event of some major oil importing countries deciding to impose fresh restrictions to curb the spread of the coronavirus variants.
West Texas Intermediate Crude oil futures for September ended down by $0.26 or about 0.4% at $71.65 a barrel.
Brent crude futures were down $0.33 or 0.44% at $73.37 a barrel a little while ago.
Weekly inventory data from the American Petroleum Institute is due later today. The Energy Information Administration’s data is due Wednesday morning.