Oil prices climbed higher on Wednesday after an industry report indicated U.S. crude stockpile plunged more than analysts projected, raising hopes that fuel demand in world’s biggest economy can weather the coronavirus pandemic.
Brent crude advanced by 38 cents or 0.85% to $44.88 per barrel at 08:37 West Africa Time, after shedding nearly 1% on Tuesday.
U.S. West Texas Intermediate oil was up by 34 cents or 0.82%, at $41.85 a barrel, having lost 0.8% in the last session.
Bonny Light, Nigeria’s premium oil grade, bucked the downtrend in the market on Tuesday, rising by 38 cent or 0.86% to $44.61 per barrel. Qua Iboe, another key national crude grade, edged up by 4 cents or 0.09% to $45.18.
On Tuesday, the American Petroleum Institute said crude inventories plummeted by 4.9 million barrels last week, more than analysts’ anticipations of draw of 2.9 million barrels. Official data is due later on Wednesday.
The “fall in U.S. API crude inventories … the third sizeable weekly fall in a row, has supported prices today,” Jeffrey Halley, Senior Market Analyst at OANDA said.
Yet, worsening uncertainty over an impasse in Washington in talks for a stimulus package to aid recovery from the deepest impact of the pandemic may affect prices looking ahead.
Fuel demand in India fell by 10.8% from a year earlier, the fifth month of year-on-year declines, government data revealed on Tuesday as an uptick in coronavirus infections and floods in several parts of the country limited economic activity.
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