Oil prices fell for the first time in four days on Wednesday, pulling back from as much as five-month highs as mounting coronavirus cases worldwide and in the United States undercut market confidence in a pickup in fuel demand.
Crude oil storage tanks are seen in an aerial photograph at the Cushing oil hub in Cushing, Oklahoma, U.S. April 21, 2020. REUTERS/Drone BaseBrent crude was down 16 cents, or 0.4%, at $44.27 a barrel by 0117 GMT. It finished 0.6% higher on Wednesday - the highest close since March 6.
West Texas Intermediate oil was down 17 cents, or 0.4%, at $41.53 a barrel. The contract ended Tuesday trading 1.7% higher, its highest close since late July.
Coronavirus cases continue rising in the United States, and deaths are at more than a 1,000 a day, while dozens of states have had to pause or scale back plans to reopen their economies.
Still, talks between Democrats in Congress and the White House on a new package of coronavirus relief started moving in the right direction, although the two sides remain far apart.
U.S. factory data this week also showed an improvement in orders, which some analysts saw as offering relief to concerns about risks to any recovery.
“Oil could be ready to test the upper boundaries of its recently tight range,” said Edward Moya, senior market analyst, at OANDA.
In the near term, though, traders shrugged off data showing a big fall in crude oil inventories in the U.S., normally enough to spur a rally in prices.
Crude inventories were down by 8.6 million barrels in the week to Aug. 1 to 520 million barrels, compared with analysts’ expectations for a drop of 3 million barrels. [API/S]
Official figures from the U.S. Department of Energy are due out later on Wednesday.