Petroleum prices found something of a resting place Wednesday near $71 a barrel, taking a breather after a strong rally in recent days as Mexico was set to resume crude production following a major outage.
Brent crude was up 33 cents, or 0.5%, at $71.38 U.S. per barrel, reversing earlier losses. U.S. West Texas Intermediate (WTI) crude was flat at $67.54 per barrel.
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.
One expert 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 one million barrels.
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 was due to be released later on Wednesday.
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.
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