Crude oil prices have dipped after a surprise increase in US crude stocks, reigniting fuel demand concerns amid the ongoing Covid-19 pandemic.

However, a fall in prices is limited due to stimulus prospects in the US, reported Reuters.

Brent crude reduced by $0.22, or 0.4%, to reach $55.86 a barrel while US West Texas Intermediate (WTI) crude futures reduced by $0.24, or 0.5%, to reach $53.07 a barrel, reported the news agency.

Axi chief market strategist Stephen Innes was cited by Reuters as saying: “Oil prices look a tad vulnerable to potential profit-taking after US crude stockpiles bearishly rose 2.56 million against consensus draw.”

However, gasoline stocks and distillate inventories, including diesel, distillate and jet fuel, spiked but less than what analysts estimated.

ING commodities strategy head Warren Patterson was cited by Reuters as saying: “Holding the market back are also persistent worries over demand.”

Patterson added that concerns are raised due to the rise in Covid-19 cases in China, resulting in targeted lockdowns.

He added: “The government will be keen to get any outbreaks under control, particularly with the Chinese New Year fast-approaching.”

Concurrently, the new US President Joe Biden signed an executive order to rejoin the Paris climate agreement to reduce carbon emissions.

He also revoked an existing permit for the Keystone XL oil pipeline project from Canada.

The US Government also intends to end new oil and gas leasing on federal lands.