After suffering heavy losses at the start of the week, crude oil prices managed to rebound sharply in the previous two days. The barrel of West Texas Intermediate (WTI), which fell to its lowest level since May 24 at $65.06 on Tuesday, gained nearly 8% in the second half of the week before going into a consolidation phase. As of writing, WTI was posting small daily gains at $71.80.
Renewed concerns over the spread of the coronavirus delta variant weighing on the energy demand put oil prices under pressure. Moreover, OPEC+ decision to ramp up the group’s output by 400,000 barrels per day each month from August put additional weight on WTI’s shoulders.
Nevertheless, the positive shift witnessed in risk sentiment and bargain shopping triggered a decisive recovery in oil prices.
Meanwhile, the data from the US showed that crude oil inventories increased by 2.1 million barrels in the week ending July 16, compared to market expectation for a decline of 4.4 million barrels. Later in the day, Baker Hughes Energy Services will release the weekly US Oil Rig Count data.