By Gina Lee
Investing.com – Oil was up Wednesday morning in Asia thanks to a brightening fuel demand outlook, but the growing number of COVID-19 cases globally capped gains for the black liquid.
Brent oil futures inched up 0.06% to $70.67 by 10:27 PM ET (2:27 AM GMT) and WTI futures inched up 0.03% to $68.31.
U.S. and European shares rose amid growing expectations that global consumption will continue upwards and tighten the market until the end of 2021.
“Crude oil is riding the coattails of a strong showing in the U.S. equity markets... some investors are also getting optimistic that the blow to demand from the delta variant spread is tampering off, if even just slightly,” Blue Line Futures LLC chief market strategist Phil Streible told Reuters.
Meanwhile, U.S. crude oil supply data from the American Petroleum Institute showed a draw of 816,000 barrels for the week ending Aug. 6. Forecasts prepared by Investing.com had predicted a 1.050-million-barrel draw, while an 879,000-barrel draw was recorded during the previous week.
Investors now await crude oil supply data from the U.S. Energy Information Administration, due later in the day.
In Asia, however, the spread of the Delta variant of COVID-19 is compounded by a slow vaccination rate, and restrictive measures currently in place could dent fuel consumption. The rising number of cases in the U.S. also continues to be of concern.
“China’s COVID-Zero strategy means restrictions could continue to widen and tighten, denting oil consumption... Delta outbreaks are certainly cause for a revaluation of the earlier anticipated trajectory of the global demand recovery," Vanda (NASDAQ:VNDA) Insights founder Vandana Hari told Bloomberg.