Crude-oil futures were edging slightly higher on Wednesday, with the commodity attempting to recover from a weekly slide induced by concerns that a fast-spreading variant of the coronavirus would lead to tighter global lockdowns, hobbling energy demand.
Investors however took some solace in signs of loosening restrictions against travel originating from the U.K., where the COVID mutation has reportedly been associated with a surge in infections.
France reopened its border with the U.K. following a ban aimed at preventing the new strain from entering Europe. Drivers will now be allowed to enter France by tunnel or ferry on the condition that they provide a negative test for the virus.
“The resumption of both transport and people between the two countries is a positive development, but the requirement for a Covid test will impede movement nonetheless,” wrote Rystad Energy oil markets analyst Louise Dicksion, in a daily note.
Those reports come as the crude market is digesting weekly data of a bigger-than-expected build in U.S. crude supplies for the recent week.
Late Tuesday, the American Petroleum Institute reported that U.S. crude supplies rose by 2.7 million barrels for the week ended Dec. 18, according to sources.
The data also reportedly showed gasoline stockpiles shrank by 224,000 barrels, while distillate inventories rose by 1.03 million barrels. Crude stocks at the Cushing, Okla., storage hub, meanwhile, climbed by 341,000 barrels for the week, sources said.
However, investors shook off that rise in inventories ahead of the more closely report from the Energy Information Administration, which will be released later Wednesday. On average, the EIA data are expected to have declined by 4.7 million barrels to around 495.4 million barrels ending Dec, 18, according to a survey of analysts conducted by S&P Global Platts, which also forecasts supply increases of 1.4 million barrels for gasoline and a drawdown of 1.1 million barrels in distillates.
West Texas Intermediate crude for February delivery was up 2 cents, or less than 0.1%, at $47.04 a barrel, after a 2% drop on Tuesday.
February Brent crude traded 8 cents, or 0.2%, higher at $50.24 a barrel on ICE Futures Europe, following a 1.6% slide in the previous session.
For the week, WTI is on pace for a weekly slump of 4.4%, while Brent is on track for a weekly decline of nearly 4%, FactSet data how, based on the most-active contracts.
Perhaps providing some modest support for crude, Reuters reported supply disruptions in Nigeria, with Exxon Mobil Corp. issuing a force majeure on the Qua Iboe crude oil export terminal, though that facility could resume operation by early January.