Wednesday, August 4

Oil Renews Decline as US Inventories Expand, Delta Spreads

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(Bloomberg) — Oil fell after a surprise build in US stockpiles and as investors weighed the impact on demand from the rapid spread of the delta variant.

West Texas Intermediate lost 0.6% in early Asian trading, resuming declines after a rise on Tuesday. The American Petroleum Institute was said to report an 806,000 barrel gain in US crude inventories, according to people familiar with the figures. The climb would be first since May, if confirmed by the Energy Information Administration later Wednesday. Gasoline holdings also expanded.

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Crude has been thrown into retreat since hitting the highest since 2014 earlier this month as the delta variant surged in parts of Asia, and spread in the US and Europe. That challenge has coincided with the Organization of Petroleum Exporting Countries and its allies patching up a row with a pact to boost production from August. Among banks, Goldman Sachs Group Inc. has warned oil will will “gyrate,” and pushed back forecasts for a rally to $80 a barrel.

The latest twist in the coronavirus pandemic has seen the delta variant now account for 83% of all sequenced cases in the US, up from 50% in early July, according to health authorities. In Asia, social-distancing curbs have been extended in Hong Kong, while Singapore will tighten measures from Thursday.

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