Despite hitting a fresh 5-month high early on in the session, crude oil futures retreated and ended with a loss on Tuesday.
Although a report from the Energy Information Administration (EIA) said crude oil output in the U.S. might drop this year, oil prices fell, presumably due to margin pressures following a huge sell-off in gold and silver futures.
West Texas Intermediate Crude oil futures for September ended down $0.33 or about 0.8% at $41.61 a barrel, after scaling a high of $42.94 a barrel earlier in the session.
Brent crude futures declined $0.37 or about 0.8% to $44.64 a barrel.
Expectations about increased demand for energy amid reports showing a drop in new coronavirus cases in the U.S., and news about Russia registering the first vaccine ‘Sputnik V.’ against the coronavirus pandemic helped limit oil’s slide.
Investors remain hopeful that U.S. Republicans and Democrats will eventually agree a comprehensive stimulus package to limit the economic damage caused by the coronavirus pandemic and boost growth.
U.S. congressional leaders and officials in President Donald Trump’s administration said on Monday they were ready to resume coronavirus aid talks.
On the data front, German economic confidence improved notably in August, survey data from the ZEW – Leibniz Centre for European Economic Research showed.
The ZEW Indicator of Economic Sentiment increased unexpectedly to 71.5 in August from 59.3 in July. The score was forecast to fall to 58.0.
Markets were also looking ahead to the weekly oil reports from the American Petroleum Institute and EIA. While the API is scheduled to release its report later today, the EIA’s data will be out Wednesday morning.