Oil Extends Losses Over Pandemic Fears, Rising US Gasoline Inventories

TOKYO, Aug. 19 (Reuters) – Crude prices extended their losses on a sixth day on Thursday, hovering near three-month lows, hit by growing fears of a slowdown in fuel demand amid increase in COVID-19 cases around the world and an unexpected increase in the United States gasoline stocks have increased the pressure.

Brent crude was down 85 cents or 1.3% to $ 67.38 a barrel at 12:19 GMT, after falling 1.2% on Wednesday. US West Intermediate (WTI) crude fell 93 cents or 1.4% to $ 64.53 a barrel after falling 1.7% in the previous session.

Both benchmarks have lost more than 5% in the past six sessions, trading near their lowest level since May 24 in the previous session.

The decline continued as investors remained concerned about the increase in infections caused by the Delta variant of the coronavirus around the world. Read more

“Crude prices continue to look vulnerable around these mid to late summer support levels – $ 65 in WTI and $ 67 in Brent,” said Craig Erlam, senior market analyst at OANDA Europe, in a note.

The slowdown in growth in China as it imposes new restrictions in response to the increase in COVID-19 cases and some weakness in a few US data points last week resulted in low oil prices, a- he quoted.

“A move below $ 65 in WTI, for example, could see prices fall back into the second quarter trading ranges between $ 57 and $ 65. That would be a drop from the levels we’ve seen over the years. last two months and would surely reflect growing concerns about the spread of the delta and the implications for fourth quarter growth, ”he added.

The surprise build-up of gasoline inventories in the United States also fueled concerns about slowing demand.

U.S. crude inventories fell 3.2 million barrels last week to 435.5 million barrels, their lowest since January 2020, the Energy Information Administration said on Wednesday.

But gasoline inventories (USOILG = ECI) rose 696,000 barrels to 228.2 million barrels, against analysts’ expectations for a decline of 1.7 million barrels.

The minutes of the U.S. Federal Reserve’s July 27-28 policy meeting showed officials noted that the spread of the Delta variant could temporarily delay the full reopening of the economy and restrict the labor market. Read more

Reporting by Yuka Obayashi; Editing by Michael Perry

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