London — Oil prices firmed on Wednesday after data showed a big drop in US crude inventories, though concerns that mounting coronavirus infections will lead to reduced fuel demand capped gains.
US crude inventories fell 8.6-million barrels in the week to August 1 to 520-million barrels, compared with analysts’ expectations for a 3-million barrel drop, the American Petroleum Institute found.“A bullish sentiment is justified initially today on the US stocks news, but we believe bulls may need to take shelter back at the ranch in coming days, as Covid-19 again takes centre stage,” Rystad Energy’s head of oil markets Bjørnar Tonhaugen said.
“We see petrol demand coming in close to 7% lower year on year throughout quarter three, with gasoil/diesel registering a decline of some 4%, implying a continued slowdown of the recovery, with a global return to 2019 levels this year increasingly in doubt,” JBC Energy said.Sentiment drew some support from signs that talks between Democrats in the US Congress and the White House on a new coronavirus relief package are making progress, though the sides remain far apart.
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