Oil futures: Crude rises 1% in volatile trade, Brent above $69/b
Quantum Commodity Intelligence – Crude oil futures rose 1% on Tuesday during choppy trade, clawing back some lost gains following Monday's brutal $5/b slump.
Front-month September Brent futures were trading at $69.27/barrel (1515 GMT) after trading in a $67.50/b-$69.60/b range over the course of the day.
On Monday the contract settled at $68.62/b.
At the same time, September WTI was trading $67.10/b, versus Monday’s settle of $66.42/b.
Tuesday's rise does little to offset the huge slump on Monday that was triggered by a broader Covid-19 fuelled sell-off in equities and news that OPEC+ had agreed a new deal to increase supply.
The OPEC+ deal adds 2 million bpd of additional production by year-end, a figure most analysts have said the market can absorb as demand recovers, although fears over the Delta variant are ripping through the market.
Those fears, sources said, triggered Monday's bout of profit-taking as money managers squared off some long positions.
"In our opinion, the pronounced price slide was due chiefly to external factors such as the rise in risk aversion, a sell-off on the stock markets and a significantly stronger US dollar," Commerzbank analyst Eugen Weinberg said in a note to clients.
"The scale of the sell-off on the oil market can also be explained in part by the fact that many speculative investors, who had yet again expanded their net long positions in both Brent and WTI in the week to 13 July, are sitting on considerable profits and have now cashed them in to some extent."
The OPEC statement after the meeting at the weekend said; "The meeting resolved to adjust upward their overall production by 400,000 bpd on a monthly basis starting August 2021, until phasing out the 5.8 million bpd production adjustment,” said OPEC in a statement Sunday.
However, delegates speaking after the meeting made it clear that regular meetings and reviews would continue, while the producer group would decide in December on the pace of 2022 increments.
Singapore markets are closed Tuesday, along with the Middle East and a number of other Asia countries.