Oil prices steadied near $71 a barrel, taking a breather after a strong rally in recent days as Mexico was set to resume crude production following a major outage.
Brent crude was up 14 cents, or 0.2%, to $71.19 a barrel today reversing earlier losses. US West Texas Intermediate (WTI) crude was up eight cents, or 0.12%, to $67.62.
Both benchmark contracts over the previous two days rose by about 8%. That rally erased most of the slump from a seven-day losing streak on the back of a resurgence in Covid-19 cases.
The rally came after Mexican supply fell by more than 400,000 barrels per day following a fire on an oil platform. Mexico's state oil firm said it expected to resume production by August 30.
American Petroleum Institute data showed crude inventories fell 1.6 million barrels for the week ended August 20, while gasoline stockpiles fell 1 million barrels, according to sources, who spoke on condition of anonymity.
Analysts were expecting crude stockpiles to fall by 2.7 million barrels and gasoline stocks to drop by 1.6 million barrels, a Reuters poll showed.
Last week's losses were driven by fears that the spread of the highly contagious Delta variant of the coronavirus in Asia would slow the region's economic recovery.
In a promising sign that the spread of Delta infections was easing in China, the country today reported just 20 new confirmed coronavirus cases for August 24, down from 35 a day earlier.
