Crude Oil Prices Continue to Fluctuate Amidst Fears of a Delta Variant of Coronavirus and Rising Tensions in the Middle East

On Wednesday, the price of Brent Crude Oil rose by 0.2% to USD 70.52 per barrel due to rising tensions between Israel and Lebanon. The price rise however, could not regain the losses seen on Tuesday. The price uncertainties rose after two rockets were launched from Lebanon on Wednesday stuck Israel.

However, on Tuesday the prices of Crude Oil settled at lower levels in the wake of rising concern about the increasing number of cases of the Delta variant of coronavirus in the US. Brent crude oil futures plummeted 48 cents (0.66%) at USD 72.41 per barrel while US West Texas Intermediate (WTI) crude remained at 70 cents (0.98%) down to USD 70.56 per barrel.  At one point, both benchmarks fell more than 3% amidst rising concerns over the spread of delta variant in the United States.

Another reason for the pressure on the prices is the expected return of Iranian crude to the markets. Iran and the major powers have been in talks since April regarding the revival of a nuclear pact which could result in the release of Iran’s oil exports from various sanctions imposed by the United States on its banking and energy sector. Iran’s new president Ebrahim Raisi has been involved in six rounds of talks between Tehran and Washington over the removal of sanctions on its oil exports.

Experts are saying that US crude and product inventories took a hit last week, with both distillates and gasoline inventories predicted to have fallen for a third straight week. The finding was supported by the American Petroleum Institute (API) suggesting that the US crude stocks fell by 879,000 barrels in week ending July 30.