Oil prices edge higher on surprise US stock drawdown, but demand concerns linger

Oil costs crept up on Thursday, supported by a shock decline of US crude inventories, however features had been capped by worries {that a} potential second wave of the coronavirus pandemic would possibly set off recent lockdowns and slam gasoline demand as soon as once more.

Brent crude futures rose 6 cents, or 0.2%, to $29.25 per barrel at 0045 GMT. US West Texas Intermediate (WTI) crude futures had been up Eight cents, or 0.3%, to $25.37 a barrel.

Crude shares within the United States had billowed since mid-January on falling gasoline demand all over the world because of the pandemic.

But US crude inventories fell by 745,000 barrels to 531.5 million barrels within the week to May 8, the Energy Information Administration mentioned on Wednesday, comforting the market after analysts in a Reuters ballot had forecast a 4.1 million barrel enhance.

“US commercial crude stocks unexpectedly fell last week, adding to growing evidence that the US oil market has passed the worst,” Capital Economics mentioned in a be aware.

Prices have risen up to now two weeks as some nations relaxed coronavirus restrictions and lockdowns, giving hope for a pickup in gasoline demand.

The temper out there has additionally been boosted main oil producers’ commitments to curb output to assist restore supply-demand steadiness.

The Organization of Petroleum Exporting Countries (OPEC) and its allies together with Russia agreed in April to curtail their manufacturing by 9.7 million barrels per day (bpd) in May and June.

Saudi Arabia, de facto chief of OPEC, additionally mentioned it will reduce its oil output by an extra 1 million bpd to 7.5 million bpd beginning in June.

In Europe, demand for petrol and diesel has begun a gradual restoration as governments eased coronavirus curbs and automobile visitors elevated in main cities, in accordance with knowledge offered to Reuters by location expertise firm TomTom.

However, considerations over a potential second wave weighed on costs as new coronavirus instances have emerged in South Korea and China after they softened restrictions.