On Wednesday, Oil Prices fell for the third day in a row to a two-week low, owing to an unexpected build in US crude stocks, a dismal US economic report, and concerns that the spread of the coronavirus Delta variant may crimp global energy consumption. Traders highlighted that the Oil Prices reduction occurred despite indications of rising geopolitical tensions in the Middle East.
Brent crude futures dropped $2.03, or 2.8 percent, to close at $70.38 a barrel, while WTI crude in the United States slid $2.41, or 3.4 percent, to settle at $68.15. Both benchmarks closed at their lowest levels since July 20. Last week, oil stockpiles increased by an unexpected 3.6 million barrels, while gasoline inventories declined by a larger-than-expected 5.3 million barrels, according to the US Energy Information Administration (EIA).
The gasoline crack spread – a gauge of refining profit margins – closed at its biggest level since April 2020, when WTI settled in negative territory, with U.S. gasoline futures reaching their highest level since October 2014. Edward Moya, senior market analyst at OANDA, said, “Crude prices remained heavy after the EIA crude oil inventory showed stockpiles unexpectedly rose last week. Noting the report was mixed as gasoline stockpiles fell more than expected.”According to a Reuters calculation, the number of Coronavirus cases worldwide topped 200 million on Wednesday, as the more-infectious Delta variety threatens places with low vaccination rates and strains healthcare systems.
The world’s two largest oil consumers, the United States and China, are dealing with quickly growing outbreaks of the highly contagious Delta type, which researchers predict would reduce gasoline demand at a time when demand typically soars in both countries.As the gap between vaccinations in wealthy and poor countries increases, the World Health Organization is calling for a halt to COVID-19 vaccine boosters until at least the end of September. ADP’s report revealing that private payrolls in the United States increased significantly less than projected in July also weighed on Oil Prices.