Oil futures stretched their streak of losses to a fourth session on Tuesday as investors continued to fret over the outlook for demand due to the ongoing spread of the delta variant of the coronavirus that causes COVID-19.

“The fundamental outlook for oil is mixed as in the immediate term,” analysts at Sevens Report Research wrote in Tuesday’s newsletter. Delta fears are weighing on demand expectations but in the medium term, a “global supply deficit is expected to last through year-end.”

Looking further down the road, sharp increases in 2022 production by the Organization of the Petroleum Exporting Countries and their allies, together known as OPEC+, are “expected to swing the market back into a surplus,” the analysts wrote. “As such, more sideways trade between support at $66 and resistance at $75” in U.S. benchmark oil prices is expected.

“Risks for a downside break do seem to be building with more uncertainty about the economic recovery emerging,” they added.

West Texas Intermediate crude for September delivery


lost 70 cents, or 1%, to settle at $66.59 a barrel on the New York Mercantile Exchange. That was the lowest front-month contract finish since Aug. 9, according to Dow Jones Market Data.

October Brent crude

the global benchmark, fell 48 cents, or 0.7%, at $69.03 a barrel on ICE Futures Europe, the lowest finish since July 19.

New Zealand took drastic action Tuesday, with the government putting the entire nation into a strict lockdown for at least three days after finding a single case of coronavirus infection in the community. The continued spread of the virus is being blamed for renewed congestion at ports in China, adding to worries about further lockdowns and the potential for a slowdown in economic activity around the world.

The Biden administration was expected to announce that most vaccinated Americans should get a COVID-19 booster shot eight months after being fully vaccinated, the New York Times reported Monday night.

Analysts Goldman Sachs believe that the delta variant wave hit to oil demand will remain “transient,” with “structural supply underinvestment increasingly clear,” according to a research note dated Monday. They expect the oil market deficit to persist through year-end, “eventually requiring a sharp increase in OPEC output and a further rebound in shale activity, which will necessitate higher prices.”

The Goldman analysts estimate that the global oil market currently remains in a roughly 1.5 million barrel per day deficit and said they still forecast Brent crude to reach $80 a barrel by the fourth quarter of this year.

Crude prices fell Monday but ended the day off session lows, finding support late in the session after Reuters reported that OPEC+ doesn’t believe the market needs more crude than they already plan to produce in coming months. The Biden administration last week urged OPEC+ to produce more crude.

Oil traders await weekly data on U.S. petroleum supplies from the Energy Information Administration Wednesday morning.

On average, analysts expect the government report to show a 3.1 million-barrel decline in domestic crude inventories for the week ended Aug. 13, according to a survey conducted by S&P Global Platts. They also forecast a fall of 2.3 million barrels for gasoline stockpiles and an increase of 700,000 barrels for distillate supplies.

On Nymex Tuesday, September gasoline

shed 1.6% to $2.17 a gallon and September heating oil

lost 0.6% to $2.04 a gallon.

September natural gas

settled at $3.84 per million British thermal units, down 2.8%, after tacking on 2.2% on Monday.

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