Oil falls on the build-up of US crude stock, spread of the Delta variant
- EIA Shows US Crude Inventories Rising, Gasoline Inventories Falling
- U.S. gasoline hits highest since April 2020 record
- Coronavirus cases around the world topped 200 million
- Private sector payroll in the United States increases less than forecast in July-ADP report
NEW YORK, Aug.4 (Reuters) – Oil prices fell for the third day in a row to a two-week low on Wednesday following a surprise increase in US crude inventories, a negative US economic report and concerns about the spread of the Delta coronavirus variant. weigh on global energy demand.
Traders noted that the drop in oil prices came despite reports of increasing geopolitical tensions in the Middle East.
Brent futures fell $ 2.03, or 2.8%, to $ 70.38 a barrel, while U.S. West Texas Intermediate (WTI) crude fell 2.41 $, or 3.4%, to come to $ 68.15.
This is the lower close for both benchmarks since July 20.
The U.S. Energy Information Administration (EIA) said crude inventories rose by an unexpected 3.6 million barrels last week, while gasoline inventories fell by 5.3 million barrels more than expected.
“Crude prices have remained elevated after EIA crude oil inventories showed inventories unexpectedly increased last week,” said Edward Moya, senior market analyst at OANDA, noting that “the report was mixed as gasoline stocks fell more than expected.
With U.S. gasoline futures nearing their highest since October 2014, the gasoline crack spread – a measure of refining profit margins – closed at its highest since hit a record high in April 2020 when WTI moved into negative territory.
Coronavirus cases around the world topped 200 million on Wednesday, according to a Reuters tally, as the most infectious Delta variant threatens areas with low vaccination rates and strains health systems.
The United States and China, the world’s two largest consumers of oil, are grappling with rapidly spreading epidemics of the highly contagious Delta variant that analysts say will limit fuel demand as it increases. traditionally in both countries.
The World Health Organization is calling for COVID-19 vaccine recalls to be stopped until at least the end of September, as the gap between vaccinations in rich and poor countries widens.
An ADP report also weighed on oil prices, showing that the private sector wage bill in the United States grew much less than expected in July.
Tensions in the Gulf of the Middle East, meanwhile, have supported oil prices.
On Tuesday, three maritime security sources claimed that Iranian-backed forces seized an oil tanker off the coast of the United Arab Emirates, although Iran denied the information.
Oman on Wednesday identified the Panamanian-flagged Asphalt Princess as the tanker involved in a hijack which the British Maritime Trade Agency had previously said was completed.
This is the second attack on an oil tanker since Friday in the region, which includes the Strait of Hormuz. Britain and the United States also blame Iran for the previous incident, in which drones crashed into the ship and killed two sailors. Iran denies the information.
Additional reporting by Ahmad Ghaddar in London and Naveen Thukral in Singapore; Editing by Marguerita Choy and Diane Craft
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