* U.S. issues travel warnings to Spain and Portugal on
* IMF cuts economic growth forecast for emerging Asia
* API says U.S. crude and fuel inventories fell - Traders
NEW YORK, July 27 (Reuters) - Oil prices held steady on
Tuesday ahead of the release of U.S. inventory data as investors
worried that global demand could be dented by surging COVID-19
cases, even though supplies are tightening and vaccination rates
U.S. crude oil, gasoline and distillate inventories fell
last week, according to two market sources, citing American
Petroleum Institute figures on Tuesday. U.S. crude prices
settled slightly lower and pared losses after the API report.
The API data showed crude stocks fell by 4.7 million barrels
for the week ended July 23 and gasoline inventories fell by 6.2
million barrels and distillate stocks fell by 1.9 million
barrels, according to the sources, who spoke on condition of
Analysts polled by Reuters expected the data to show U.S.
crude stocks fell by about 2.9 million barrels and gasoline
stocks fell by 900,000 barrels in the week to July 23.
Official inventory data is due from U.S. Energy Information
Administration on Wednesday.
Brent futures slipped 2 cents to settle at $74.48 a
barrel, while U.S. West Texas Intermediate (WTI) crude
fell 26 cents, or 0.4%, to settle at $71.65. That was the first
decline for Brent in six days.
U.S. crude pared losses in post-settlement trade as the
markets reacted to the API data, trading at $71.89 a barrel by
5:06 p.m. ET (2106 GMT).
"The problem right now seems to be the Delta variant of the
coronavirus, which is holding the market back even though all
the evidence right now suggests a dramatic tightening of
supplies," said Phil Flynn, senior analyst at Price Futures
Group in Chicago. He said that tightness otherwise should cause
prices to "break out to the upside."
Britain reported its highest number of deaths and people in
hospital with coronavirus since March. The U.S. Centers for
Disease Control and Prevention (CDC) was set to recommend fully
vaccinated Americans wear masks indoors in some instances,
The United States issued travel warnings to Spain and
Portugal because of rising COVID-19 cases.
Olympic host city Tokyo was on track to report a record
number of coronavirus cases even as athletes continued to
Global economic growth prospects remained strong, even
though most economists in Reuters polls were worried about new
variants of the coronavirus.
The International Monetary Fund maintained its 6% global
growth forecast for 2021, upgrading its outlook for wealthy
economies but cutting estimates for developing countries
struggling with surging infections.
U.S. consumer confidence inched up to a 17-month high in
July, with households' spending plans rising even as concerns
about higher inflation lingered.
Analysts tracking mobility data remain confident about fuel
demand, counting on vaccinations.
Global oil markets are expected to remain in deficit despite
a decision by the Organization of the Petroleum Exporting
Countries (OPEC) and allies, collectively known as OPEC+, to
"Robust road traffic data across most major regions suggests
rising infections are having minimal impact," ANZ Research
U.S. gasoline futures rose to their highest since
October 2014 in intraday trade after gaining almost 10% over the
past six days. That boosted the 3-2-1 <CL321-1=R> and gasoline
<RBc1-CLc1> crack spreads - a measure of refining profit margins
- to their highest since May.
"Gasoline strength represents a bullish consideration across
the complex as it has begun to translate to stronger Brent
premiums against WTI," said Jim Ritterbusch, president of
Ritterbusch and Associates in Galena, Illinois.
The premium of the Brent front-month over WTI <WTCLc1-LCOc1>
rose to its highest since May.
(Additional reporting by Ahmad Ghaddar in London, Shu Zhang and
Sonali Paul in Singapore, and Jessica Resnick-Ault in New York;
Editing by David Holmes, David Goodman, David Gregorio and