Oil was trading lower than expected as of this writing, with investors analyzing a sudden build in U.S. crude oil supplies and continuing to evaluate the effect of multiplying COVID-19 cases on fuel demand.
Brent oil futures traded down 0.46% to $69.03 and WTI futures dropped0.51% to $66.86 – as of this writing.
U.S. crude oil supply data from the American Petroleum Institute shared on Tuesday demonstrated a build of 806,000 barrels for the week ended July 16th. Forecasts prepared by several sources had forecasted a draw of 4.167 million barrels, while a 4.079-million-barrel draw was seen during the previous week.
Should the build be established in crude oil supply data from the U.S. Energy Information Administration, later on, it would be the first since May.
Oil has been experiencing a downward trend ever since touching its highest peaks since 2014 earlier this month. The number of COVID-19 cases including the new Delta variant has grown globally and the Organization of Petroleum Exporting Countries and allies (OPEC+) resolutions of its dispute means increased production from August 2021 onwards.
This made Goldman Sachs Group Inc. (NYSE:GS) to note that oil will “gyrate,” and push back predictions for a rally to $80 per barrel.
Some investors were rather optimistic, however.
“The damage to re-openings from the Delta variant has certainly dented sentiment across the board when we look at commodities in general, but specifically to the oil markets… still, we would expect that the demand for oil continues to remain relatively robust. And we would expect it to continue to recover,” UBS AG Wealth Management strategist Wayne Gordon told Bloomberg.
The black liquid’s losses were part of a widespread weakness across commodities, with gasoline, copper and iron ore also recording losses. The dollar, however, inched up on Wednesday, making commodities priced in the currency more expensive.