Brent crude futures for September gained 11 cents to $82.51 a barrel and U.S. West Texas Intermediate crude for September jumped 5 cents to $78.45 per barrel
Oil prices steadied on Tuesday after dropping for the past two sessions, as investors remained cautious amid expectations of ample supplies and weak demand, while dismissing the U.S. presidential campaign upheaval.
Brent crude futures for September gained 11 cents to $82.51 a barrel by 0645 GMT. U.S. West Texas Intermediate crude for September jumped 5 cents to $78.45 per barrel.
Traders mostly ignored U.S. President Joe Biden’s decision to call off his reelection bid and endorse Vice President Kamala Harris on Sunday. Citi analysts said they believed neither Harris nor Republican nominee Donald Trump would promote policies that would greatly affect oil and gas operations.
Instead, the market focused on fundamentals, which Morgan Stanley analysts said were likely to balance out by the fourth quarter and rise to a supply surplus by next year, which would pull down Brent prices to the mid-to-high $70s per barrel range.
Any increase in oil prices was more because of market consolidation and dip buying activity, said Priyanka Sachdeva, senior market analyst at Phillip Nova.
Any further weakening of demand signals, along with a resolution in Gaza, could lead to a further decline in oil prices, Sachdeva said, adding that a swell in U.S. inventories last week would be a sign of dented demand.
The American Petroleum Institute (API), a trade group, is due to release its estimates for last week’s oil inventories on Tuesday, while official U.S. government data is scheduled to come on Wednesday.
A preliminary Reuters poll of six analysts estimated that U.S. crude stocks, on average, dropped by 2.5 million barrels in the week to July 19, while gasoline stocks likely declined by 500,000 barrels.