By Adedapo Adesanya
The Brent crude recorded its third consecutive loss on Wednesday by going down by $2.23 or 3.1 per cent to sell at $70 per barrel.
The United States crude benchmark, West Texas Intermediate (WTI) was also not left out as it depreciated by $2.61 or 3.7 per cent to settle at $67.95 per barrel.
It was observed that the oil market was dampened by a triple whammy surprise build in crude stockpiles and negative economic reports in the United States as well as worries about the spread of the coronavirus Delta variant.
The market, which was already hurting, was hit harder when the Energy Information Administration (EIA) reported an inventory build of 3.6 million barrels for the week to July 30.
This was higher than what analysts had expected, a 2.9 million barrels draw. At the previous week, the EIA had estimated an inventory draw of 4.1 million barrels.
Earlier, the American Petroleum Institute (API) had estimated a smaller-than-expected draw in crude oil inventories of 879,000 barrels for the week ending July 30.
Apart from this, the market was also faced with worries about soaring COVID as investors focused on the fast-spreading Delta variant which is resurging in China, the US, and many other countries from Europe to Southeast Asia and Australia.
In China, the city of Wuhan, the ground zero for the coronavirus, will test all its 12 million residents which have prompted authorities to impose strict measures to bring the outbreak under control.
In the US, about 40,000 people are currently hospitalized because of COVID-19, according to the Johns Hopkins Coronavirus Resource Center, same as it was this time last year. However, the death rates have dropped due to vaccines and mitigation efforts.
Globally, cases worldwide surpassed 200 million on Wednesday, as the more infectious variant threatens areas with low vaccination rates and strained healthcare systems.
The market was also impacted by a sharp slowdown in US job growth as data showed that private payrolls rose by 330,000 jobs, showing the smallest gain in private payrolls in five months in July and far lower than expected.
The latest scare outweighed concerns about supply from the Middle East, where a tanker was reportedly a target of a hijacking attempt off the coast of the United Arab Emirates.
On Tuesday, sources claimed Iranian-backed forces seized an oil product tanker off the coast of the UAE. This is the second attack on a tanker since Friday in the region, which includes the Strait of Hormuz.
The United Kingdom and the United States blamed Iran for the earlier incident, in which drones crashed into the vessel and killed two sailors.
