Oil rises after bigger-than-expected drop in inventories

Oil rises after bigger-than-expected drop in inventories

Oil prices moved higher on Wednesday after an industry report showed that U.S. inventories of crude fell more than analysts expected, bolstering hopes that fuel demand in the world’s biggest economy can weather the coronavirus pandemic.

Brent crude was up 52 cents, or 1.2%, at $45.02 a barrel by 06:48 GMT, after falling around 1% on Tuesday.

West Texas Intermediate oil was up 49 cents, or 1.2%, at $42.10 a barrel, having dropped 0.8% in the previous session, Reuters reported.

The American Petroleum Institute [API] said on Tuesday that crude stocks fell by 4 million barrels last week, more than analysts’ expectations of draw of 2.9 million barrels. Official government data is due later on Wednesday. 

Still, growing uncertainty over a stalemate in Washington in talks for a stimulus package to support recovery from the deepest impact of the pandemic may weigh on prices looking ahead.

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