Oil Down for Third Consecutive Day as COVID-19 Concerns Continue

© Reuters.

By Gina Lee

AiVIF.com – Oil was down Wednesday morning in Asia, falling for a third consecutive day as concerns about the increasing numbers of COVID-19 cases globally dampen the fuel demand outlook.

Brent oil futures inched down 0.03% to $72.39 by 11:34 PM ET (3:34 AM GMT) and WTI futures edged down 0.20% to $70.42. Both Brent and WTi futures fell on Tuesday to their lowest levels since Jul. 21 before clawing back some of the losses as the session closed.

Rising numbers of COVID-19 cases in the U.S. and China, the top two oil importers globally, are also clouding the fuel demand outlook.

"Seasonal weakness in economic activity amid rising cases of the Delta variant of COVID-19 continue to weigh on sentiment... nearly half of China's provinces have been being gripped by the latest outbreak. This comes as the summer travel season hits its peak. This is likely to see crude oil demand come under pressure," ANZ said in a note.

The spread of COVID-19 cases from China’s coast to inland cities re-implementation of restrictive measures and dampened

In China, the spread of the variant from the coast to inland cities prompted authorities to impose strict measures to bring the outbreak under control.

Investors are looking to rising geopolitical tensions in the Middle East, which could offset the demand concerns.

Iran refuted reports that it was involved in a second attack on an oil tanker on Tuesday, this time off the coast of the United Arab Emirates. The U.K. and U.S. also continue to hold the country responsible for an earlier attack on a tanker in the region that took place last week.

Oil also got some support from U.S. data indicating declines in crude oil, distillate and gasoline inventories over the past week.

U.S. crude oil supply data from the American Petroleum Institute released on Tuesday showed a draw of 879,000 barrels for the week ending Jul. 30. The draw was smaller than both the 2.9-million-barrel draw in forecasts prepared by AiVIF.com and the 4.728-million-barrel draw recorded during the previous week.

Investors now await crude oil supply data from the U.S. Energy Information Administration, due later in the day.