Oil prices rise on expectations of decline in US crude inventories

 Oil rose on Tuesday, recovering from previous day's drop, as expectations of further declines in US crude inventories outweighed fears that spreading Covid-19 variants could derail global recovery

By Yuka Obayashi
TOKYO (Reuters) - Oil rose on Tuesday, recovering from the previous day's drop, as expectations of further declines in U.S. crude inventories outweighed fears that spreading COVID-19 variants could derail a global economic recovery.

Brent crude for September climbed 25 cents, or 0.3%, to $75.41 a barrel by 0036 GMT, after losing 0.5% on Monday. U.S. West Texas Intermediate crude for August was at $74.33 a barrel, up 23 cents, or 0.3%, having fallen 0.6% the previous day.

"Optimism about tight supply and declining U.S. crude stockpiles lent support," said Toshitaka Tazawa, an analyst at commodities broker Fujitomi Co, adding that bullish global equities also helped boost risk appetite among investors.

"Still, growing concerns over a spike in COVID-19 infection cases worldwide and uncertainty over production plans by OPEC+ will likely limit gains," he added.

U.S. crude inventories were expected to fall for an eighth consecutive week, while gasoline stocks also declined, a preliminary Reuters poll showed on Monday.

Crude stockpiles have declined steadily for several weeks, with U.S. inventories falling to the lowest since February 2020 in the week to July 2.

Underpinning market sentiment, a gauge of global stocks closed at a record on Monday as investors looked for signs on whether the Delta variant of the COVID-19 coronavirus could hamper economic growth.