Oil futures edged lower Wednesday as investors tracked COVID-19 cases and awaited official data on U.S. crude inventories after an industry trade group reported a fall in supplies.
West Texas Intermediate crude for March delivery fell 15 cents, or 0.3%, to $52.46 a barrel on the New York Mercantile Exchange. March Brent crude, the global benchmark, was off 5 cents, or 0.1%, at $55.86 a barrel on ICE Futures Europe.
“Market participants are now in ‘wait and see’ mode, wanting to see how lockdowns evolve in the coming weeks and months, and how successful countries are in rolling out Covid-19 vaccines,” said Warren Patterson, head of commodities strategy at ING, in a note.
“The one factor which has made the market a bit nervous about demand is the localized lockdowns that we are seeing in parts of China,” he said.
On the inventory front, the American Petroleum Institute reported late Tuesday that U.S. crude supplies declined by 5.3 million barrels for the week ended Jan. 22, according to sources. The data also reportedly showed gasoline stockpiles rose by nearly 3.1 million barrels, while distillate inventories climbed by 1.4 million barrels.
Crude stocks at the Cushing, Okla., storage hub, meanwhile, declined by 3.5 million barrels for the week, sources said.
More closely followed inventory data from the Energy Information Administration is due Wednesday morning. On average, the EIA are expected to show crude inventories down by 1.7 million barrels, according to a survey of analysts conducted by S&P Global Platts. The survey also shows expectations for an inventory increase of 1.2 million barrels for gasoline and a decline of 800,000 barrels for distillates.