Oil prices climbed up Wednesday following an abrupt fall in U.S. crude storage even though demand fears from unprecedented rises in coronavirus cases limited gains.
Brent Crude futures advanced by 56 cents or 1.30 per cent to $43.78 per barrel by 12:24 West Africa Time. U.S. West Texas Intermediate crude futures jumped 43 cents or 1.05 per cent to $41.47 a barrel.
Nigeria’s top crude grade, Bonny Light, expanded by 61 cents or 1.43% to $43.23 at the last session. But another major national offering, Qua Iboe, dipped by 4 cents to 0.09% to $43.72 on the same day.
Stocks of U.S. crude oil dived by 6.8 million barrels to 531 million barrels last week according to statistics provided by industry group, American Petroleum Institute on Tuesday.
Analysts’ projections in a Reuters poll were for a rise of 357,000 barrels. Figures from the U.S. government are due on Wednesday.
Head of Oil Markets at Rystad Energy, Bjornar Tonhaugen, said ‘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.’
The pandemic is feeding fears about crashing fuel demand, triggering a market saturated with supply as record numbers of COVID-19 cases are globally reported, including in the U.S, 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,’ Stephen Brennock of oil brokerage PVM said.
One-day records for coronavirus deaths were posted by six U.S. states Tuesday and cases in Texas alone topped 400,000.
Refiners in India are reducing oil processing and closing units for revamp in the midst of sluggish fuel demand, officials at the firms said.
Moves to offer relief in the face of the outbreak were in jeopardy on account of failure of agreement among Republicans over their own blueprint for providing $1 trillion in fresh coronavirus aid on Tuesday.
Analysts worry over the uncertainties to any U.S. recovery just as another Federal Reserve policy statement due for issue Wednesday afternoon will demonstrate how seriously central bankers evaluate them.
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