Oil rises as market shrugs off virus impact

Oil prices rose more than $1, recouping some of the losses in the previous session, as rise of demand in Europe and the United States outweighed concerns over a rise of COVID cases in Asian countries.

Brent crude was up $1.06, or 1.5%, at $70.10 a barrel by 1134 GMT, and U.S. oil rose $1.29 cents, or 1.9%, to $67.77 a barrel.

Both contracts dropped around 2.5% on Monday, but analysts believe the pandemic setback will not last for long.

U.S. crude, gasoline, and other product inventories are likely to have dropped last week, with gasoline stocks forecast to fall for a fourth consecutive period, a preliminary Reuters poll showed on Monday. EIS/S

Crude oil inventories are expected to have fallen by about 1.1 barrels in the week to Aug. 6, according to the average estimate of six analysts polled by Reuters.

In the United States, the Senate is set to vote on the passage of a $1 trillion infrastructure bill later on Tuesday, which, if passed would boost the economy and demand for oil products, analysts said.

Successful vaccination programmes in the West and encouraging economic data come in sharp contrast to the rising infection in the East.

In Australia, the police force is on the street to enforce COVID-related restrictions and some cities in China, the world's top crude oil importer, have stepped up mass testing as authorities try to stamp out a new surge of the virus.