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By Gina Lee
Investing.com – Oil was up Tuesday morning in Asia, clawing back some losses from the previous session that saw the black liquid drop to a three-week low. However, fuel demand concerns remain as COVID-19 cases continue to increase.
Brent oil futures was up 0.42% to $69.33 by 12:31 AM ET (4:31 AM GMT), tumbling 2.3% on Monday. WTI futures gained 0.66% to $66.92 having slid 2.6% in the previous session.
China reported a record number of daily COVID-19 cases on Monday, as the world’s top oil importer attempts to bring this number down to zero. Restrictive measures have already been implemented in large parts of the country, which has, in turn, dampening the fuel demand outlook.
“Chinese mobility on roads and air traffic is down, so what traders are wondering now is whether or not other large oil-consuming and producing regions will start to see a China-like demobilization,” Macquarie Capital Oil & Gas Economist Vikas Dwivedi told Bloomberg.
“We could see this domino effect, where other regions follow China’s lead and that would lead to lower oil demand for the remainder of this year and beyond,” he added.
Investors now await a European Union decision on whether or not to reverse the current policy that allows Americans into the block. A decision to reverse this policy would “negate what could have been a better future demand profile,” said Dwivedi.
Investors also await U.S. crude oil supply data from the American Petroleum Institute, due later in the day.