Oil eases after surge on U.S. stocks draw

Crude oil prices slid on Thursday but held most of their gains from the last session after U.S. government data reported a decline in inventories. This supported the market’s view that fuel demand recovery is pushing through despite the pandemic.

Brent crude fell 8 cents to $45.35 per barrel after gaining 2% on Wednesday. U.S. West Texas Intermediate slipped 6 cents to $42.61 per barrel after climbing 2.6% in the last session.

U.S. crude oil, gasoline, and distillate stocks fell last week as refiners increased production and demand recovered.

U.S. fuel demand climbed to 19.37 million bpd last week, its highest since March. Crude output dropped to 10.7 million bpd.

Crude stocks eased by 4.5 million barrels, significantly bigger than analysts’ expectations for a 2.9 million-barrel decline.

The Energy Information Administration predicted U.S. crude production to fall by 990,000 bpd to 11.26 million bpd this year. This revised forecast also supported oil prices.

However, OPEC reported that global oil demand will decline by 9.06 million bpd in 2020, putting a cap on gains.

Analysts said that the deadlock in Washington over the coronavirus stimulus aid may also weigh on oil prices.