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Brent crude was up 14 cents, or 0.2%, to $71.19 a barrel by 1028
GMT, reversing earlier losses. U.S. West Texas Intermediate (WTI)
crude was up 8 cents, or 0.12%, to $67.62.
Both benchmark contracts over the previous two days rose by
about 8%. 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.
Analysts were expecting crude stockpiles to fall by 2.7 million
barrels and gasoline stocks to drop by 1.6 million barrels, a
Reuters poll showed.
U.S. Energy Information Administration official data is due to
be released on Wednesday at 1430 GMT.
Last week's losses were driven by fears that the spread of the
highly contagious Delta variant of the coronavirus in Asia would
slow the region's economic recovery.
In a promising sign that the spread of Delta infections was
easing in China, the country on Wednesday reported just 20 new
confirmed coronavirus cases for Aug. 24, down from 35 a day
earlier.
(Additinoal reporting by Roslan Khasawneh in Singapore and
Sonali Paul in Melbourne; editing by Edmund Blair and Jason
Neely)
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