By Adedapo Adesanya
The Brent crude was sold at $71.11 per barrel on Tuesday after climbing by $2.44 or 3.55 per cent amidst concerns about global demand started to ease.
It was observed that the rise in the price of the commodity was partly buoyed by a supply disruption in Mexico, which also pushed the price of the United States West Texas Intermediate (WTI) crude oil futures northwards by $2.08 or 3.17 per cent to $67.72 per barrel.
On Monday, both jumped more than 5 per cent rebounding from the longest losing streak since 2019 of seven consecutive settlements in the red as investor risk appetite increased and the U.S. dollar softened.
The weaker Dollar continued to support oil prices early on Tuesday but a fire at an oil platform off Mexico on Sunday that has cut state-run Pemex’s oil production by about 25 per cent pushed prices higher.
Reports show that five workers died and the fire injured six others. Currently, the platform and 125 wells are offline, which reduced Mexico’s crude oil production by 421,000 barrels per day.
A restart of the platform could take days, meaning prices of heavy sour crude oil grades are rising on the US Gulf Coast as the market braces for disruption of supplies from Mexico.
Another support for the market was the positive outcome of China’s zero COVID policy, as the world’s top crude oil importer has reported zero symptomatic COVID cases for the first time in weeks.
The country’s zero COVID approach prioritises pandemic mitigation over everything else, especially given the highly contagious nature of the Delta strain. China some weeks ago shut down a key servicing sector due to one person contracting the disease.
In India, the world’s third-largest exporter, refiners’ crude throughput in July bounced to its highest in three months as fuel demand rebounded and buoyed prices.
In addition, the U.S. Food and Drug Administration (FDA) gave the full approval on Monday to the Pfizer-BioNTech COVID-19 vaccine, the first vaccine to get full approval from the FDA, which had given emergency use authorization to the Pfizer and other vaccines.
Some experts say that the full approval could encourage hesitant people to get a vaccine amid surging Delta variant cases in many parts of the world.
Data from trade group the American Petroleum Institute (API) is expected with official data from the Energy Information Administration (EIA) released later on Wednesday.
