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Oil Rises on Expected Further Draw in U.S. Crude Inventories

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Oil prices climbed on Tuesday, reversing some of the previous days losses, as tight supply and expectations of a further draw in U.S. crude inventories provided support, although fears over the spreading COVID19 variant capped gains.

Brent crude for September rose 19 cents, or 0.3, to 75.35 a barrel by 0421 GMT, after losing 0.5 on Monday. U.S. West Texas Intermediate crude for August was at 74.34 a barrel, up 24 cents, or 0.3, having fallen 0.6 the previous day.

Optimism about tight supply and declining U.S. crude stockpiles lent support, said Toshitaka Tazawa, an analyst at commodities broker Fujitomi Co.

Still, growing concerns over a spike in COVID19 infection cases worldwide and uncertainty over production plans by OPEC will likely limit gains, he added.

U.S. crude inventories were expected to fall for an eighth consecutive week, while gasoline stocks also declined, a preliminary Reuters poll showed on Monday.

Crude stockpiles have declined steadily for several weeks, with U.S. inventories falling to the lowest since February 2020 in the week to July 2.

Chinas crude imports in June edged up slightly from May, though they were down sharply from a year earlier when refiners snapped up cheap oil to supply a market recovering from the coronavirus.

Investors shrugged off the Energy Information Administrations EIA monthly drilling productivity report which said crude output from seven major shale formations is expected to rise by 42,000 bpd in August, to 7.907…

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