As the capillary tube is placed into the water, the water is drawn up into the tube due to capillary action. When the tip of the tube is placed back down onto the paper towel, the water continues to be drawn up into the tube until it reaches equilibrium with the surrounding environment. This results in a small amount of water being left on the paper towel and the capillary tube containing water up to a certain height. This phenomenon is due to the adhesive forces between the water molecules and the walls of the capillary tube overcoming the gravitational forces acting on the water.
