LONDON, July 21 (Reuters) – Oil prices rose more than 3% on Wednesday, extending gains from the previous session as improving risk appetite provided support despite data showing an increase unexpected oil inventories in the United States last week and weaker demand outlook due to the rise in COVID -19 contaminations.

Brent crude futures had gained $ 2.13, or 3.1%, to $ 71.48 a barrel at 1403 GMT. US West Texas Intermediate (WTI) crude futures rose $ 2.27, or 3.4%, to $ 69.47 a barrel.

“Oil (…) seems to have found support as risk appetite increases again,” said Ricardo Evangelista, ActivTrades analyst.

“This support comes after the sharp declines recorded in recent sessions, triggered by the apprehension of the impact of the Delta variant (…), as well as the agreement between the OPEC + countries to increase production “, he added.

Oil prices fell on Monday following an agreement between the Organization of the Petroleum Exporting Countries and its allies, known as OPEC +, to increase supply by 400,000 bpd each August to December. The sale was exacerbated by fears that an increase in cases of the Delta variant of the coronavirus in major markets like the United States, Britain and Japan could affect demand.

A potential rise in US inventories weighed on prices early in the session.

US crude inventories rose 806,000 barrels for the week ending July 16, two market sources said, citing figures from the American Petroleum Institute.

Analysts polled by Reuters had expected stocks to drop sharply. Official data from the US Energy Information Administration is due later Wednesday.

JPMorgan analysts said global demand is expected to average 99.6 million barrels per day in August, up 5.4 mbd from April. But they also said: “We are only seeing 4Q21 demand recovering an additional 330,000 from a standard 2019 baseline, as colder weather sets in in the northern hemisphere and peak travel season is reached. behind us.”

Additional reporting by Sonali Paul in Melbourne and Roslan Khasawneh in Singapore; edited by Jane Merriman and Kirsten Donovan

Our Standards: Thomson Reuters Trust Principles.

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