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Oil Extends Losses In Choppy Trade

Oil prices fell in choppy trade on Wednesday, extending losses for the third straight session on concerns that curbs to combat the spread of the delta coronavirus variant will hurt demand. The downside was limited amid signs of increasing tightness in the U.S. market.

Brent crude futures for October delivery eased 0.3 percent to $72.19 a barrel, while U.S. crude futures for September settlement traded 0.6 percent lower at $70.16 per barrel.

Investors are watching the spread of the more contagious Delta strain of COVID-19 in the U.S., Europe and Asia, and particularly in key consumer China.

China today reported its highest daily number of local coronavirus cases in months as mass testing and contact tracing campaigns uncovered a trail of Delta variant infections.

According to media reports, the Delta variant of the virus has been spreading into places that had remained free of virus for months, including the original virus epicentre of Wuhan. The strain has reached nearly half of China's 32 provinces in just two weeks.

Traders weighed the risk to consumption posed by the virus spread as the Organization of Petroleum Exporting Countries and its allies increase output.

Helping limit the downside for oil was U.S. crude oil supply data from the American Petroleum Institute, released on Tuesday, which showed crude stockpiles fell 879,000 barrels for the week ending Jul. 30.

Investors await key oil supply data from the U.S. Energy Information Administration later in the day for further direction.

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