Petroleum prices fell again on Wednesday as the spread of the coronavirus Delta variant in top consuming countries trumped Mideast geopolitical tensions and a fall in U.S. inventories.
Brent crude oil futures were down $1.80, or 2.5%, at $70.61 U.S. per barrel. U.S. West Texas Intermediate crude dipped $2.25, or 3.2%, to $68.31 per barrel.
The United States and China, the world’s two biggest oil consumers, are grappling with rapidly spreading outbreaks of the highly contagious Delta variant that analysts fear will limit fuel demand at a time when it traditionally rises in both countries.
In China, the spread of the variant from the coast to inland cities has prompted authorities to impose strict measures to bring the outbreak under control.
An expected fall in U.S. inventories, however, capped some losses, and both contracts traded slightly higher earlier in the session.
U.S. crude inventories fell by 879,000 barrels for the week ended July 30, according to two market sources, citing figures from industry group American Petroleum Institute.
Meanwhile, tensions in the Mideast Gulf also lent prices some support.
On Tuesday, three maritime security sources clamed Iranian-backed forces seized an oil product tanker off the coast of the United Arab Emirates, though Iran denied the reports.
This is the second attack on a tanker since Friday in the region, which includes the Strait of Hormuz. The UK and the U.S. are also blaming Iran for the earlier incident, in which drones crashed into the vessel and killed two sailors.
