Oil prices rose on Wednesday after a surprise drop in U.S. crude inventories, though gains were capped by demand concerns after record increases in COVID-19 infections in some U.S. states, Reuters reported.
Brent crude futures rose 38 cents, or 0.9%, to $43.60 a barrel by 1345 GMT. U.S. West Texas Intermediate crude futures CLc1 gained 26 cents, or 0.6%, to $41.30.
Inventories of crude oil in the United States dropped by 6.8 million barrels last week to 531 million barrels, data from the American Petroleum Institute showed on Tuesday.
Analyst expectations in a Reuters poll were for an increase of 357,000 barrels. U.S. government data is due later on Wednesday.
“A relief of 6.8 million barrels could normally help prices rise even further, but concerns over a new supply glut coming from August are capping gains,” said Rystad Energy’s head of oil markets, Bjornar Tonhaugen.
The pandemic is keeping alive concerns about falling fuel demand causing an oversupplied market as record numbers of coronavirus infections are reported globally, including in the United States, the world’s biggest oil consumer.
“The virus is spreading like wildfire across the Americas while Europe and Asia are displaying worrying signs of a second surge in cases,” said Stephen Brennock of oil brokerage PVM.
Six U.S. states reported one-day records for coronavirus deaths on Tuesday and cases in Texas passed the 400,000 mark.
Indian refiners are cutting crude processing and shutting units for maintenance as fuel demand falters, officials at the companies said.
Attempts to provide relief amid the outbreak were in disarray after Republicans in the United States on Tuesday disagreed over their own plan for providing $1 trillion in new coronavirus aid.
Analysts are concerned about the risks to any U.S. recovery, while a new Federal Reserve policy statement due later on Wednesday will show how seriously central bankers assess them.
Additional reporting by Aaron Sheldrick in Tokyo; Editing by Louise Heavens and David Goodman
