Oil prices fell on Wednesday as investors worried about fuel demand due to fresh outbreaks of COVID-19, though prices drew some support after U.S. stocks of diesel fuel fell for the first time in weeks and U.S. oil production dropped sharply.
Brent crude LCOc1 was down 31 cents, or 0.8%, at $40.65 a barrel at 10:50 EST (1450 GMT). U.S. West Texas Intermediate (WTI) CLc1 fell 43 cents, or 1.1%, to $37.95 a barrel.
U.S. crude inventories rose by 1.2 million barrels, but distillate stockpiles USOILD=ECI, which include diesel and heating oil, fell by 1.4 million barrels following weeks of significant builds as refiners continued to blend jet fuel into their distillate pool, EIA data showed on Wednesday.
“That snapped a 10-week streak of builds, and the market needed that,” said Bob Yawger, director of energy futures at Mizuho in New York.
U.S. oil production fell last week to 10.5 million barrels per day, lowest since March 2018. Some of that was due to Storm Cristobal, which shut more than one-third of U.S. offshore output.
The World Health Organization said it was moving to update its guidelines after results showed the corticosteroid medication dexamethasone cut death rates by about a third among the most severely ill COVID-19 patients.—Reuters