Crude oil prices eased slightly on Thursday but held most of their gains from the previous session after U.S. government data showed a fall in inventories, supporting the view that fuel demand is returning despite the coronavirus pandemic.
Brent crude LCOc1 was down 8 cents at $45.35 a barrel by 0150 GMT, after a gain of around 2% in the previous session. West Texas Intermediate CLc1 oil was down by 6 cents at $42.61 a barrel after gaining 2.6% on Wednesday.
U.S. crude oil, gasoline and distillate inventories fell last week as refiners ramped up production and demand improved, a government report showed. [EIA/S]
U.S. fuel demand rose to 19.37 million barrels per day last week, the highest since March, data from the Energy Information Administration (EIA) showed, while crude output fell to 10.7 million barrels per day (bpd) from 11 million bpd.
“The fourth quarter could see much higher oil prices if the energy market starts to brace for a shortage of oil,” said Edward Moya, senior market analyst at OANDA.
Crude inventories USOILC=ECI fell by 4.5 million barrels, compared with analysts’ expectations in a Reuters poll for a 2.9 million-barrel drop.
The EIA’s downward revision on Tuesday to a key U.S. oil production forecast for this year also supported prices. U.S. crude production is forecast to fall by 990,000 bpd this year to 11.26 million bpd, steeper than the 600,000 bpd decline it forecast last month.
Capping gains, the Organization of the Petroleum Exporting Countries said in a monthly report that world oil demand will fall by 9.06 million bpd this year, more than the 8.95 million bpd decline expected a month ago.
Increasing uncertainty over a stalemate in Washington on a stimulus package to support recovery from the deepest impact of the coronavirus pandemic may also weigh on prices, analysts said.