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Oil steadies as frail demand outlook tempers US inventory drawdown

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LONDON: Oil costs steadied on Thursday, as a fall in U.S. inventories final week was tempered by a stronger greenback and a renewed wave of COVID-19 instances in Europe that led a number of international locations to reimpose journey restrictions.

Brent crude futures have been up 10 cents, or 0.2%, to $41.87 a barrel by 1100 GMT, whereas U.S. West Texas Intermediate (WTI) crude futures rose Eight cents, or 0.2%, to $40.01 per barrel.

Both benchmarks traded decrease earlier within the session.

On Wednesday, costs climbed barely after authorities information confirmed U.S. oil inventories fell final week.

Crude shares fell by 1.6 million barrels, gasoline by four million barrels, and distillate stockpiles posted a shock drawdown of three.four million barrels.

Still, gas demand within the U.S. stays subdued because the pandemic limits journey. The four-week common of gasoline demand was 8.5 million barrels per day (bpd) final week, the federal government information confirmed, down 9% from a yr earlier.

“The current economic and oil backdrop is anything but encouraging and this capped the attempted rally,” Tamas Varga of oil brokerage PVM mentioned.

The jitters over demand and financial outlook because of the coronavirus resurgence have spurred a rally within the greenback as traders turned to safer property, including strain on oil costs. A stronger greenback makes oil much less engaging to patrons utilizing different currencies.

Prices have been additionally capped by information displaying a cooling of U.S. enterprise exercise in September, the stalemate in the U.S. Congress over extra fiscal stimulus and U.S. Federal Reserve officers flagging issues a couple of stalling restoration

In Europe, Britain, Germany and France imposed new restrictions to stem new coronavirus infections – all components affecting the gas demand outlook.

On the provision facet, the market stays cautious of a resumption of exports from Libya, though it’s unclear how rapidly it may ramp up volumes.

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