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Oil prices are rising on the biggest crude oil inventory draw since last year

Last week, US crude oil inventories shed 10.6 million barrels, compared with 4.9 million barrels for the previous week, according to the report of the Energy Information Administration in the US.

The American Petroleum Institute published an estimated oil inventory decline of 6.83 million barrels a day earlier. Analysts expected a much more modest draw of 357,000 barrels. The API’s report was followed by a surge in new coronavirus infections in the US. It offset the oil price gains. 

Despite last week’s reports and fears of a slowdown in gasoline demand recovery, strategic commodity prices increased. Crude oil prices went slightly up from the previous day’s close. Brent crude traded at $43.77 a barrel with a 1.27% increase after Tuesday’s close at $43.22 a barrel. WTI settled at $41.12 a barrel with an increase of 0.19% after the previous session’s close at $41.04.

 

The global oil demand remains negative

However, there has been growing skepticism. Travel is increasing, but still, not much has changed. 

The global demand for black gold remains mostly negative. Coronavirus is resurging not only in the United States but in other countries of the world. So, optimism about the oil industry is declining. 

The trend has slowed in Asia too, which was experiencing improved fuel demand as the coronavirus outbreak has partially balanced. The report of the Energy Information Administration may help change that. The situation is slightly better in Europe

Over the past couple of weeks, the $40-43 range has proved quite resilient. The global economic outlook amid the pandemic remains overwhelmingly pessimistic. 

The total number of coronavirus cases in the world has exceeded 16.7 million, according to the latest data from Johns Hopkins University. The United States continues to lead with the most cases at 4.3 million. The death toll in the country has surpassed 150,000. Medical experts warn that deaths will skyrocket if the country does not control the pandemic. Brazil follows it with almost 2.5 million cases. Meanwhile, India has the third-highest with more than 1.5 million infected. 

Concerns over a second wave of infections are growing in Europe. The UK is likely to prolong the self-isolation period for people who are showing possible coronavirus symptoms.  

The expectations for an oil demand recovery around the world remain lower, especially in the US, the most significant oil consumer in the world.  

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