Oil prices fell on Tuesday as outbreaks of the highly contagious COVID-19 variant Delta and the re-emergence of travel restrictions raised fears over demand ahead of Thursday’s OPEC meeting.
International benchmark Brent crude was trading at $74 per barrel at 06.55 GMT, a 0.19% decrease after closing Monday at $74.14 a barrel.
American benchmark West Texas Intermediate (WTI) traded at $72.86 a barrel at the same time, a 0.07% drop after ending the previous session at $72.91 per barrel.
Uncertainties on whether restrictions due to the coronavirus variant will be re-imposed in Europe and many Asian countries are weighing on prices.
"The forecast for oil demand recovery over the summer may be a bit overestimated and traders are facing a reality check this week as the Delta variant reached Europe, and as infections surge in Southeast Asia and Australia to bring back lockdowns," said Rystad Energy’s Oil Markets Analyst Louise Dickson.
Investors also await US crude oil inventory data to be announced by the country's Energy Information Administration (EIA) on Wednesday. Another key signal anticipated is the outcome of the Organization of the Petroleum Exporting Countries and other affiliated producers, known as OPEC , at Thursday’s meeting, and whether it will reflect investor demand fears in their production quota decision.
"The market consensus is that OPEC will likely raise production by about 500,000 bpd [barrels per day] for August, which would still be a net positive for oil prices as it doesn’t fully satiate the swiftly growing demand profile over summer, depending on the Delta variant developments, of course," Dickson said.
The UK saw its highest daily number of coronavirus cases since the end of January this year.
In Russia, 21,650 coronavirus cases were recorded over the past day, raising the overall count to more than 5.47 million with active cases reaching 369,708 – the highest figure since Jan. 20.
Bangladesh recorded a new spike in COVID-19 infections with 8,364 cases, raising fears of a serious crisis in hospital beds if the surge continues.