Oil continues upward momentum but coronavirus worries cap gains

Crude oil prices rose on Wednesday after U.S. oil inventories data fell more than expected and OPEC raised its oil demand outlook. However, fears about a surge in COVID-19 infections and rising supplies capped gains. 

Brent crude futures gained 0.6%, or 42 cents, at $64.09 per barrel after climbing 39 cents on Tuesday. U.S. West Texas Intermediate crude futures rose 0.7%, or 40 cents, at $60.58 per barrel, following a 48-cent rise on Tuesday.

Signs of strong U.S. and Chinese economic recoveries supported recent price gains. However, worries over stalled vaccine rollouts globally and a surge in COVID-19 cases in India and Brazil capped gains.

OPEC raised its forecast for global oil demand for 2021 on Tuesday. The organization is expecting demand to climb by 5.95 million bpd in 2021, up by 70,000 bpd from its forecast last month. 

Further supporting the market on Wednesday, API data is likely to show that crude stocks dropped by 3.6 million barrels in the week ended April 9, compared with expectations for a 2.9 million barrel drawdown.