Oil futures fell yesterday, reflecting concerns regarding the spread of the Delta variant of COVID-19. Brent oil futures fell by 2.80%, losing ground for the third consecutive day and closing the session at the 70.38 level. West Texas Intermediate Crude Oil futures went down by 3.42%, also losing ground for the third consecutive day and closing the session at the 68.15 level.
Tensions are now rising in the Middle East after Israel struck southern Lebanon in response to an unprovoked attack. After the Lebanese fired two rockets towards Israeli civilian territory, Israel responded with artillery fire.
Tensions between Israel and Iran have also been escalating after the Iranians attacked an Israeli oil tanker in the Gulf last week, though the Iranian regime denied their participation in the incident.
The Energy Information Administration also reported that crude oil inventories went up by 3.6 million barrels to 439.2 million barrels. The data went against expectations of a 3.1-million-barrel drop. Gasoline stocks dropped by 5.3 million barrels, way below expectations of a 1.8-million-barrel decline. Distillate stockpiles gained 833,000 barrels, surpassing expectations of a 543,00-barrel drop.
According to analysts, oil demand itself seems unaffected by concerns regarding the advance of the Delta variant of the coronavirus, which has helped to keep supply levels relatively high.
"Despite concern about the (coronavirus) Delta variant, we are not seeing it impacting U.S. product demand in a large way. I think overall that can be viewed as supportive," commented an analyst from CHS Hedging.
However, it's still not clear what will happen, especially now that the death toll is beginning to rise.
The coronavirus keeps spreading across the world. Since the beginning of the pandemic, 201,017,394 COVID-19 cases have been reported, as well as 4,270,342 deaths related to it. The most affected country in the world is the United States, with 36,176,471 cases reported since the beginning of the pandemic as well as 631,299, followed by India, Brazil, Russia and France.
Global governments are now advancing massive vaccination campaigns. So far, 4.28 billion dosages have been distributed among the world’s population, with 1.16 billion individuals now fully vaccinated, accounting for 14.9% of the total population.
By 8:11 GMT, brent oil futures remained almost steady at the 70.40 level, gaining 0.04. On the other hand, West Texas Intermediate Crude Oil futures fell by 0.09 to the 68.09 level.