The oil ends up lower, retreating from recent gains as COVID cases rise

NEW YORK (Reuters) – Oil prices fell Wednesday, lower from recent gains, on concern that rising global COVID-19 may hamper global fuel demand.

The market has found support from weekly inventory data that showed a decline in crude oil inventories and an increase in refinery production.

Brent crude oil prices stood at $ 56.06 per barrel, down 52 cents or 0.9%. US West Texas Intermediate (WTI) came in at $ 52.91 a barrel, down 30 cents, or 0.6%.

Fuel demand has rebounded from Last spring’s shock fell as the COVID-19 pandemic worsened, but governments continue to place travel restrictions that will hold back energy demand for months, analysts said.

“Even as I see crude oil prices trading higher in the coming months, investors need to be aware that the road to higher oil demand and prices will remain bumpy,” said UBS oil analyst Giovanni Staunovo.

U.S. crude oil inventories were lower for the fifth straight week, dropping 3.2 million barrels last week, surpassing analysts’ expectations in a Reuters poll for a 2.3 million barrel decline as refineries fell. increased crude oil runs, the Energy Information Administration said. [EIA/S]

“Refineries are starting to see a better demand picture and this is reflected not only in what we are seeing in the US but also overseas,” said Phil Flynn, senior analyst at Price Futures Group in Chicago.

Governments across Europe announced tougher and longer coronavirus lockdowns on Wednesday due to a rapidly spreading COVID variant first detected in Britain and as vaccinations are not expected to help much for another two to three months.

China has seen the largest daily increase in coronavirus cases in more than five months, despite blockades, increased testing and other measures to prevent another wave of infections.

Saudi Arabia cut crude oil supplies for the February cargo to at least three Asian buyers, meeting the requirements of at least four others, several refinery and commercial sources told Reuters.

Additional reporting by Ahmad Ghaddar in London and Aaron Sheldrick in TOKYO; Editing by Marguerita Choy and David Gregorio