Oil Prices Fall as Demand Woes Overshadow Inventory Fall

Prices for petroleum fell on Wednesday despite industry data showing a bigger-than-expected drop in U.S. crude inventories. Rising global COVID-19 infections sparked demand fears.

Brent crude prices slid 45 cents, or 0.8%, to $56.13 U.S. per barrel mid-morning Wednesday. U.S. West Texas Intermediate (WTI) was 28 cents, or 0.53%, lower at $52.93 per barrel.

Data from the American Petroleum Institute showed crude stocks in the U.S. dropped by 5.8 million barrels last week to around 484.5 million barrels – far more than analysts’ expectations in an economist poll for a fall of 2.3 million barrels.

Official Energy Information Administration inventory data was expected later on Wednesday.

Saudi Arabia cut supplies of crude for February loading for at least three Asian buyers while meeting requirements of at least four others, several refinery and trade sources told Reuters on Wednesday.

But rising COVID-19 death tolls in Europe and the United States and fresh virus containment measures elsewhere weighed on prices.

China recorded the biggest daily jump in COVID cases in more than five months, despite four cities in lockdown, increased testing and other measures aimed at preventing another wave of infections in the world’s second biggest economy.