Tuesday, 28 September, 2021

Oil prices steady near $71 after two-day rally

Oil prices steady near $71 after two-day rally

LONDON: Oil prices steadied near $71 a barrel, taking a breather after a strong rally in recent days as Mexico was set to resume crude production following a major outage.

Brent crude was up 14 cents, or 0.2 per cent, to $71.19 a barrel by 1028 GMT, reversing earlier losses. U.S. West Texas Intermediate (WTI) crude was up8 cents, or 0.12 per cent, to $67.62, report agencies.

Both benchmark contracts over the previous two days rose by about 8 per cent. That rally erased most of the slump from a seven-day losing streak on the back of a resurgence in COVID-19 cases.

The rally came after Mexican supply fell by more than 400,000 barrels per day following a fire on an oil platform. Mexico’s state oil firm said it expected to resume production by Aug. 30.

“While volatility looks set to continue, we see further gains for oil as global economic normalisation continues and OPEC remains disciplined on crude supplies,” said Mark Haefele, chief investment officer at UBS Global Wealth Management.

The bank expects Brent crude prices to rise to $75 a barrel by December.

American Petroleum Institute data showed crude inventories fell 1.6 million barrels for the week ended Aug. 20, while gasoline stockpiles fell 1 million barrels, according to sources, who spoke on condition of anonymity.