Oil falls on rising coronavirus cases, U.S. stock draw caps losses

Oil prices fell for a second straight day on Thursday as rising global COVID-19 cases raised demand worries, despite a U.S. crude stock drawdown capping losses.

Brent crude oil futures slid 0.1%, or 5 cents, at $56.01 per barrel. U.S. West Texas Intermediate crude futures was down 1 cent to $52.90 per barrel.

U.S. crude oil inventories fell more than expected last week. However, gasoline and distillate stockpiles rose as producers increased output to its highest level since August.

Meanwhile, China posted its highest daily COVID-19 cases in over 10 months. Europe imposed stricter lockdown restrictions due to a quick-spreading new COVID variant discovered in Britain. 

Producers are facing difficulties in balancing demand and supply as various factors including vaccine rollout cloud the outlook.