Oil markets eased on Tuesday after a five-day rally as investors took profits on fears that higher prices may weaken fuel demand, though market sentiment remained firm amid tight supply.
Subsequently Brent crude futures fell 17 cents, or 0.2 per cent to $79.36 a barrel after surging 1.8 per cent and reaching its highest since October 2018 on Monday.
U.S. West Texas Intermediate (WTI) crude futures dropped 9 cents, or 0.1 per cent to $75.36 a barrel, having risen 2 per cent and hitting its highest since July the previous day.
“Oil markets took a breather after a long rally, with some investors scooping up profits,” said Toshitaka Tazawa, an analyst at Fujitomi Securities Co Ltd, adding that there were also concerns that surging oil prices may reduce fuel demand.
“Still, the market sentiment remained strong with tighter supply,” he said, predicting that Brent may try a key $80 a barrel soon.
Top African oil exporters Nigeria and Angola will struggle to boost output to their OPEC quota levels until at least next year as underinvestment and nagging maintenance problems continue to hobble output, sources at their respective oil firms warn.
Their battle mirrors that of several other members of the OPEC+ group who curbed production in the past year to support prices when COVID-19 hit demand, but are now failing to ramp up output to meet soaring global fuel needs as economies recover.
Boosting investors’ risk appetite, Goldman Sachs raised by $10 its year-end forecast for Brent crude to $90 per barrel.
tightened due to the fast recovery of fuel demand from the outbreak of the Delta variant of the coronavirus and Hurricane Ida’s hit to U.S. production.