02:40 PM EDT, 07/27/2021 (MT Newswires) -- West Texas Intermediate (WTI) crude oil fell for a second day on Tuesday as concerns over tight supplies with economies recovering from the pandemic came up against off against concerns that the rapid spread of the Covid-19 Delta variant will continue to limit demand.
WTI crude for September delivery settled down US$0.26 to US$71.65 per barrel, Marketwatch reported. September Brent crude, the global benchmark, was last seen down US$0.10 to US$74.40, while Western Canada Select was last seen down US$0.74 to US$57.53 per barrel.
While supply remains tight as demand rises, OPEC+ will increase its production by 400,000 barrels per day monthly beginning in August, while a rising U.S. rig count is expected to increase shale-oil output that has been constrained by producers who've been unwilling to spend to raise their production.
"The oil market remains slightly undersupplied despite the fact that OPEC+ will be expanding its oil production step by step by 2 million barrels per day over the next five months. Only next year is there a risk of an oversupply if OPEC+ sticks with the production hikes it is planning to implement in 2022," Commerzbank analyst Carsten Fritsch said in a release.
However the spread of the Delta variant is keeping traders cautious as international flights remain limited due to travel bans and domestic restrictions. The New York Times on Tuesday reported new U.S. cases have more than doubled over the past two weeks to 56,635 on Monday, with more than half a million new cases worldwide.