Oil prices fall on U. S. crude stock build, Delta variant spread

Oil prices fell for a third day in a row to a two- week low on Wednesday on a surprise build in U. S. crude stockpiles and as the spread of the coronavirus Delta variant outweighed the impact of Mideast geopolitical tensions.

The U. S. Energy Information Administration ( EIA) said crude stockpiles rose 3.6 million barrels during the week ended July 30.

That compares with the 3.1- million barrel draw analysts forecast in a Reuters poll and the 0.9- million barrel decline the American Petroleum Institute ( API) reported on Tuesday.

Brent futures fell $ 1.09, or 1.5percent, to $ 71.32 a barrel by 10: 51 a. m. EDT ( 1451 GMT), while U. S. West Texas Intermediate ( WTI) crude fell $ 1.43, or 2.0percent, to $ 69.13.

That puts both benchmarks on track for their lowest since July 20. For Brent, it puts the contract down for a third day in a row for the first time since late May.

“Worries continue to grow over the spread of the Delta variant in China, which has weighed heavily on oil prices in recent days,” analysts at bank ING said.

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 anticipate 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.