Oil was falling Thursday morning in Asia, with a new rally fizzling, as build-in U.S. gasoline inventories and a possible Organization of the Petroleum Exporting Countries and partners (OPEC+) arrangement to increase supply clouded the black liquid’s outlook.
Brent oil futures were under 0.68% to $74.25 by 1:38 AM ET (5:38 AM GMT) and WTI futures dropped 0.74% to $72.59.
Tuesday’s U.S. crude oil supply data from the U.S. Energy Information Administration (EIA) revealed a draw of 7.897 million barrels for the week to Jul. 9, an eighth continuous week of draws. The draw was more significant than both the 4.359-million-barrel draw in estimates provided by Investing.com and the 6.866-million-barrel draw registered throughout the previous week.
EIA data also unveiled a 1.039-million-barrel build in gasoline inventories.
Crude oil supply data distributed by the American Petroleum Institute a day before bestowed a draw of 4.079 million barrels.
Saudi Arabia and the United Arab Emirates (UAE) reportedly settled a conflict that caused the collapse of an OPEC+ meeting earlier in the month. They waved August supply developments in the balance.
The most advanced breakthrough project gives the UAE a higher input quota, with talks resuming. Nevertheless, other OPEC+ members are also asking for better terms, with Iraq reportedly seeking a higher production baseline.
Investors remain worried
With the possibility of more supply from OPEC+ and crude nearing overbought levels, it’s not unusual to see it down, Tyche Capital Advisors LLC, managing member of the global macro program Tariq Zahir informed Bloomberg.
Nevertheless, investors continue worried regarding the recent outbreaks of coronavirus involving the Delta variant in numerous countries and its influence on fuel demand. Australia reached a lockdown in Sydney by a further two weeks, while daily cases in South Korea struck a record high of 1,600 as of Jul. 15.
Trouble is cooking for the oil market. Fears are rising that rising coronavirus Delta cases could pause full economic recovery. This, in turn, acts as a significant peril to oil demand growth in the near-to-medium-term, PVM Oil Associates Ltd. analyst Stephen Brennock informed Bloomberg.