MELBOURNE: Oil rose in early trade on Tuesday, paring sharp overnight losses, as the latest tropical storm in the Gulf of Mexico lost strength, but worries about fuel demand persisted with flare-ups around the globe in coronavirus cases.
U.S. West Texas Intermediate (WTI) crude futures for October, due to expire on Tuesday, rose 26 cents, or 0.7per cent, to US$39.57 a barrel at 0224 GMT. The more active November contract rose 15 cents, or 0.4per cent, to US$39.69, report agencies.Brent crude futures rose 13 cents, or 0.3per cent, to US$41.57 a barrel.
Crude prices started to recover as Texas refineries stayed open despite forecasts of heavy flooding, with Tropical Storm Beta expected to keep losing strength, allaying worries about U.S. refinery demand for feedstock.
Both oil benchmarks fell around 4per cent on Monday, hit by rising concerns that an increase in coronavirus cases in major markets could spur fresh lockdowns and hurt demand. That raised the possibility that Libyan oil could return when it isn’t needed.
“We had a pretty punchy risk-off session (overnight) ... on fears around the risk that a COVID resurgence starts to have negative impacts on demand again,” said Lachlan Shaw, National Australia Bank’s head of commodity research.