In light of today’s news about China, the world’s biggest importer of crude, had contained the spread of the fast-spreading Delta variant of the coronavirus, Oil prices rebounded.

Brent, the international benchmark, rose 2.70 per cent to $66.94 a barrel at 12.26pm UAE time. West Texas Intermediate, which tracks US grades, was up 2.64 per cent at $63.78 a barrel.

China, which enforced strict measures to contain the spread of Covid-19, reported zero local cases on Monday.

Oil recovered after falling to its lowest level since May last week. The benchmarks lost 10 per cent of their value earlier this month as new lockdowns to contain the more virulent Delta variant curbed demand.

Commodities, including oil, fell last week after the minutes of the US Federal Reserve’s July meeting, which indicated a reversal of the US central bank’s quantitative easing policy has been in place to support the economy since the onset of the pandemic.

“The strengthening of the US dollar amid global risk-off sentiment was also a factor affecting commodity prices,” said Monica Malik, chief economist at Abu Dhabi Commercial Bank.

She said the oil market situation will “remain fluid” at this point.

The bank has left its crude oil forecast unchanged and expects Brent to average $68.50 a barrel this year. The international benchmark has averaged $66.9 a barrel this year.

Oil markets also await the next move of Opec+, the group controlling a significant portion of oil market supply. The alliance is set to meet on September 1.

Opec+, which is led by Saudi Arabia and Russia, has come under pressure from the White House to bring more supply back to the markets.

The group is already pumping an additional 400,000 barrels per day and plans to return 2 million bpd by the end of the year.

The Opec+ group is expected to “maintain its plans to gradually increase output at its September meeting, if prices stabilise around the current levels in the coming weeks”, Ms Malik said.

“However, if the downward pressure on oil prices continues due to weak demand conditions, tweaks to the planned increase in Opec+ production cannot be ruled out completely,” she said.