Oil prices retreated on Thursday as major producers warned of a risk to demand recovery if the coronavirus crisis is prolonged as U.S. crude inventories dropped less than expected.
Brent crude was down 36 cents, or 0.8 per cent at $45.01 a barrel by 0442 GMT, having slipped 0.2 per cent in the previous session.
U.S. oil was down 38 cents, or 0.9 per cent at $42.55 a barrel, after inching higher on Wednesday.
Stockpiles of crude in the U.S. fell a fourth straight week, even as net imports rose, the Energy Information Administration (EIA) said on Wednesday.
However, the 1.6 million-barrel decline for the week to Aug. 14 was less than a Reuter’s poll showing expectations for a 2.7 million-barrel fall.
Fuel demand was down 14 per cent from the year-earlier period over the last four weeks, the EIA data also showed.
Oil demand around the globe is expected to bounce back to pre-pandemic levels as early as the fourth quarter, according to the Saudi Energy Minister who also charged the OPEC+ partners of the Kingdom to follow through with a deal to reduce oil output.
Saudi Energy Minister, Prince Abdulaziz bin Salman, was speaking at a virtual meeting of the Organisation of the Petroleum Exporting Countries (OPEC) and allies such as Russia – a grouping known as OPEC+.
The meeting was geared at reviewing the compliance level with production cuts and left output reductions unchanged.
“The positive outcome from the OPEC+ meeting was counter-balance to the EIA reporting that U.S. oil inventories last week fell by (less than the) consensus,’’ said Avtar Sandu, Senior Manager, Commodities at Phillip Futures.
Still, a draft OPEC+ statement, seen by Reuters, said a second extended wave of the pandemic posed a major risk for the oil market recovery.