Oil rises on U.S. crude stocks fall, outlook still bleak

Oil prices rose on Thursday after a sudden fall in U.S. crude stocks. However, further gains were capped amid a gloomy U.S. economic outlook and fears of a second coronavirus wave.

Brent crude futures climbed 0.2%, or 6 cents, at $29.25 per barrel. U.S. West Texas Intermediate crude futures gained 0.7%, or 18 cents, at $25.47 per barrel. 

Prices rose in recent weeks as countries worldwide began easing lockdowns. However, a rise in new cases in China and South Korea raised worries about a possible second wave of infections.

U.S. crude stocks dropped 745,000 barrels to 531.5 million barrels in the week ended May 8. This decline provided a floor for oil prices in early trading on Thursday.

OPEC forecasted that 2020 global oil demand would contract by 9.07 million bpd, worse than its earlier forecast of 6.85 million bpd.

OPEC and its allies including Russia agreed in April to slash production by 9.7 million bpd in May and June. Saudi Arabia said that it will further cut its own production by another 1 million bpd in June.