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Brent crude was up $1.06, or 1.5%, at $70.10 a barrel by 1134
GMT, and U.S. oil rose $1.29 cents, or 1.9%, to $67.77 a barrel.
Both contracts dropped around 2.5% on Monday, but analysts
believe the pandemic setback will not last for long.
"This turbulence should remain temporary, not the least as
Western world oil demand is back at, or above, pre-pandemic
levels and is draining global supplies," said Nortbert Ruecker,
analyst at Swiss bank Julius Baer.
U.S. crude, gasoline, and other product inventories are likely
to have dropped last week, with gasoline stocks forecast to fall
for a fourth consecutive period, a preliminary Reuters poll
showed on Monday. [EIS/S]
Crude oil inventories are expected to have fallen by about 1.1
barrels in the week to Aug. 6, according to the average estimate
of six analysts polled by Reuters.
In the United States, the Senate is set to vote on the passage
of a $1 trillion infrastructure bill later on Tuesday, which, if
passed would boost the economy and demand for oil products,
analysts said.
Successful vaccination programmes in the West and encouraging
economic data come in sharp contrast to the rising infection in
the East.
In Australia, the police force is on the street to enforce COVID-related
restrictions and some cities in China, the world's top crude oil
importer, have stepped up mass testing as authorities try to
stamp out a new surge of the virus.
"The lockdowns (in China) could instigate a momentary pause in
price action, but as COVID-19 cases are expected to abate
quickly given the relatively low number of infections, the
downside may be fleeting," said StoneX analyst Kevin Solomon.
Economic data this week, especially the U.S. Consumer Price
Index on Wednesday, will provide guidance on how hard the virus
will hit global and regional oil consumption, analysts said.
(Reporting by Bozorgmehr Sharafedin in London, additional
reporting by Aaron Sheldrick in Tokyo; editing by Richard Pullin,
Shri Navaratnam and Louise Heavens)
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