Oil prices rise on surprise drop in US stocks

29 July 2020 (Last Updated July 31st, 2020 14:35)

Global oil prices climbed on Wednesday after a surprise fall in US crude inventories was enough to appease concerns about fuel demand amid record increases in Covid-19 infections in the country.

Oil prices rise on surprise drop in US stocks
According to the American Petroleum Institute, crude oil inventories in the US dropped by 6.8 million barrels last week. Credit: gloriaurban4 from Pixabay.

Global oil prices climbed on Wednesday after a surprise fall in US crude inventories was enough to appease concerns about fuel demand amid record increases in Covid-19 infections in the country.

Brent crude futures increased by $0.18 to $43.40 a barrel while the US West Texas Intermediate crude futures climbed $0.12 to trade at $41.16 per barrel, reported Reuters.

According to the data provided by the American Petroleum Institute, crude oil inventories in the US dropped by 6.8 million barrels last week to settle at 531 million barrels.

Market analysts predicted an increase of 357,000 barrels.

However, concerns about weak fuel demand due to increasing Covid-19 infections continue to drag the market.

This comes after four US states reported the highest single-day jump of Covid-19 related deaths.

ING Research was quoted by the news agency as saying: “It is becoming more apparent that the demand recovery many were expecting in oil over the second half of the year was just too optimistic.

“A resurgence in Covid-19 cases, along with continued travel restrictions has meant that this demand recovery has stalled, or at least slowed.”

Earlier, the Republican Party in the US unveiled a $1tn coronavirus relief plan. However, the move faced opposition from the Democrats and some Republicans.

The US is one of the worst affected by the pandemic reporting the highest number of confirmed Covid-19 cases. As of 29 July, more than 4.3 million people in the US are infected by the disease with nearly 150,000 deaths.