Peter Nurse   

Investing.com — Tuesday’s stagnation in oil prices was due to recent selling, mainly on account of increased supply and increasing Covid-19 case numbers.

At 9:15 am ET (1415 GMT), futures had fallen 0.2% to $79.56/barrel, while futures were steady at $82.06. After falling for the third consecutive week last week, both contracts were lower Monday.

U.S. U.S.

Even with these losses, Crude oil prices have remained at their seven-year peak. Strong numbers out of the U.S. also suggest an increase in economic activity for the months ahead. However, there is a possibility that the balance of supply and demand may change as a result of forecasts of global production growth in the next months.

“The world oil market remains tight by all measures, but a reprieve from the price rally could be on the horizon,” the International Energy Agency said  Tuesday in its monthly report. “Production in the U.S. is ramping up in tandem with stronger oil prices.”

Paris-based institute reported that the global oil output rose by 1.4million barrels per hour last month and that it will continue to rise over November and December, as Gulf of Mexico oil firms restore supplies damaged by Hurricane Ida.

According to data from, U.S. oil companies added oil and drilling rigs last week for the third consecutive week.

Mohammad Barkindo, Secretary General of OPEC, stated on Tuesday that he anticipates an oil supply surplus in December as well as the market remaining oversupplied in next year.

This indicates that the Organization of the Petroleum Exporting Countries, along with its allies, will keep their current policy of increasing oil output slowly through 2022.

“Consequently, the market is waiting for any developments from the U.S. administration that may ease prices. If action is to be taken, the most likely route would be a release from the Strategic Petroleum Reserve,” said analysts at ING, in a note.

The U.S. crude oils inventory data will be released from the US later in the session.

The demand side is positive. While the U.S., which is the largest oil consumer in the world shows repeated signs that it’s recovering, news elsewhere has been less encouraging with an increase in Covid-19 case numbers.

Austria and the Netherlands announced already partial lockdowns. A number of European countries have been considering similar moves. This region is likely to become the epicenter of pandemic once again as winter nears.

China is also the largest crude importer in the world. The Delta variant has caused the most severe Covid-19 epidemic, affecting 21 provinces, areas, and municipalities.