By Adedapo Adesanya
The prices of oil futures pointed north on Tuesday as data indicated expectations of a second straight weekly decline in the United States crude supplies.
Brent crude rose 31 cents or 0.75 per cent to $41.75 per barrel while the United States West Texas Intermediate (WTI) crude ticked up by 24 cents or 0.61 per cent to $39.55 per barrel.
Analysts expect the US Energy Information Administration (EIA) on Wednesday to report a fall of 4 million barrels in domestic crude inventories for the week ended September 18.
However, this is a contrast to another group, the American Petroleum Institute (API), which reported on Tuesday a build in crude oil inventories of 691,000 barrels for the period.
Ahead of the API report, some analysts had predicted an inventory draw of 2.256 million barrels.
In the previous week, the API reported a significant draw in crude oil inventories of 9.517 million barrels, after analysts had predicted a smaller draw of 1.271 million barrels.
But the expectations for the EIA data outweighs that of API because the former is the government source.
Also, crude prices, which fell about 3 per cent on Monday, steadied as Texas refineries stayed open despite forecasts of heavy flooding, with Tropical Storm Beta expected to keep losing strength.
The possibility of Libyan oil returning to the market amid an increase in coronavirus cases in major markets means more worries as countries begin to install fresh lockdowns, therefore, hurting demand. This will have a heavy impact on prices in the coming days. But since the return will be gradual, it will give market participants time to understand the situation.
Markets are worried about demand in places like the United Kingdom, where fresh restrictions are being imposed while health officials in the United States are also warning of a new wave in the coming winter.
The resurgence of cases will lead governments to impose restrictions while individuals and businesses will start to retreat and these are all bad for demand recovery.
