Oil was anchored near $40 a barrel as investors weighed virus and weather-driven demand concerns against expectations U.S. crude and gasoline stockpiles continued to shrink. Vaccine trials are showing promising results but the pandemic is still raging unabated in many regions across the globe, while in China, the nation’s top refiner plans to cut operating rates at some of its plants this month due to severe flooding. Meanwhile, American crude inventories probably fell for the third time in four weeks, according to a Bloomberg survey.

Oil’s recovery from its plunge below zero has stalled with surging infections across major economies raising doubts about a swift demand rebound. OPEC+ is preparing to return supply to the market next month after its historic cuts, while Chinese buying has cooled, leading to a decline in physical crude prices.

“The pace of oil price improvement in the face of real virus demand risks will likely remain sluggish,” Stephen Innes, chief market strategist at AxiCorp Ltd., said in a note. “There remains more considerable downside than upside price risk” unless the virus curve flattens and lockdowns are rolled back, he said.

  • West Texas Intermediate for August delivery, which expires Tuesday, rose 0.4% to $40.96 a barrel on the New York Mercantile Exchange after advancing 0.5% on Monday
    • The more-active September contract gained 16 cents to $41.08 as of 7:50 a.m London time
  • Brent for September settlement added 22 cents to $43.50 on the ICE Futures Europe exchange after rising 0.3% in the previous session
    • Prompt timespread was at a contango of 18 cents