Oil prices edge higher

Oil prices climbed on Wednesday after a surprise drop in U.S. crude inventories was enough to offset concerns about U.S. fuel demand amid record increases in COVID-19 infections in some states. Brent crude futures were up by 18 cents, or 0.4%, at $43.40 a barrel by 0644 GMT. U.S. West Texas Intermediate crude futures gained 12 cents, or 0.3%, to $41.16 a barrel.

Inventories of crude oil in the United States dropped by 6.8 million barrels last week to 531 million barrels, data from industry group the American Petroleum Institute showed on Tuesday. Analysts’ expectations were for an increase of 357,000 barrels. U.S. government data is due Wednesday.

But, the raging COVID-19 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 U.S., the world’s biggest consumer of oil.

Attempts to provide relief amid the outbreak were in disarray as Republicans in the U.S. disagreed over their own plan for providing $1 trillion in new coronavirus aid on Tuesday. Analysts are concerned about the risks to any U.S. recovery, while a new Federal Reserve policy statement due to be released later on Wednesday afternoon will show how seriously central bankers assess them.

Oil prices edge higher as U.S. inventory drop counters demand concerns tied to COVID-19, Reuters, Jul 29