By Dmitry Zhdannikov
LONDON (Reuters) -Oil prices steadied on Wednesday after four straight days of declines, with investors still worried about the outlook for fuel demand as a global surge in COVID-19 cases constrains air, rail and other forms of travel.
Brent crude was up 26 cents, or 0.4%, to $69.29 a barrel by 1343 GMT. U.S. WTI crude oil gained 11 cents, or 0.2%, to $66.70 a barrel.
“In the short-term, the oil market may be volatile with frequent pull-backs as crude prices are beginning to struggle as demand in Europe and India faces headwinds,” said Avtar Sandu at Phillip Futures in Singapore.
A stronger dollar was also hitting commodities across the board, with metals and gold in particular looking as “equally fragile” as oil, ANZ Research said in a note.
Crude is typically priced in dollars, so a stronger U.S. currency makes oil more expensive, hitting demand.
In the United States, more supply is set to hit the market if official forecasts prove right.
U.S. shale oil production is expected to rise to 8.1 million barrels per day (bpd) in September, the highest since April 2020, according to the Energy Information Administration’s monthly drilling output report.
U.S. crude oil and gasoline inventories fell last week, two market sources said, citing American Petroleum Institute figures on Tuesday, while distillate stocks rose.
Financial markets overall are turning sour in response to the progress of the Delta variant of the coronavirus, softer U.S. economic data and “a sombre reflection on what is going on in Afghanistan,” ING analysts said in a note.
(Reporting by Aaron Sheldrick in Tokyo and Dmitry Zhdannikov in LondonEditing by Jason Neely, David Goodman and Paul Simao)
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