Oil prices are easing as US inventories jumped surprisingly and worries about Reuters demand

© Reuters. FILE PHOTO: Pump Jacks operate in a Midland oil field at sunset

By Jessica Jaganathan

SINGAPORE (Reuters) – Oil prices fell on Wednesday due to a surprise surge in US inventories. Investors continued to worry that fuel demand could be depressed amid tightened lockdowns in Europe to combat the coronavirus pandemic.

Futures fell 11 cents, or 0.2%, to $ 50.65 a barrel at 0421 GMT, while US West Texas Intermediate (WTI) crude oil futures fell 9 cents, or 0.2%, to $ 47.53 a barrel fell.

“Crude oil prices are slightly weaker after the American Petroleum Institute (API) inventory report was published for the second year in a row,” said Edward Moya, senior market analyst at OANDA.

Crude oil inventories rose 2 million barrels to about 495 million barrels in the week ended December 11, according to industry group API.

According to a survey by Reuters, analysts had expected a draw of 1.9 million barrels. Official government dates were scheduled for Wednesday.

The introduction of vaccines to fight the coronavirus pandemic this month will not quickly reverse the devastation of global oil demand, the International Energy Agency (IEA) warned on Tuesday.

The IEA has cut its estimates for oil demand by 50,000 bpd this year and 170,000 bpd next year (citing scarce fuel consumption) as fewer people travel by air.

“On the demand side, the United States is the biggest near-term downside risk to oil demand expectations, largely due to the ongoing weakness in US gasoline demand amid the current development of COVID-19 in the country,” FGE analysts wrote a note.

Even so, progress in introducing vaccines continued the Tuesday after Moderna (NASDAQ 🙂 Inc’s COVID-19 vaccine was approved for U.S. approval this week.

The US on Tuesday also expanded the rollout of the newly approved COVID-19 vaccine developed by Pfizer Inc (NYSE 🙂 and German partner BioNTech SE (NASDAQ 🙂 on Tuesday inoculated hundreds more distribution centers with hundreds more healthcare workers that are expected to reach the general public in the coming months.

U.S. Congress leaders also reported significant progress on Tuesday after two meetings of top Democrats and Republicans to end a month-long stalemate over coronavirus aid and finalize a draft funding to prevent a government shutdown.

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