Oil edges down for 2nd session as coronavirus curbs fuel demand

* Rising coronavirus cases reduce U.S. summer fuel
consumption
* U.S. crude inventories rise by 4.9 million barrels
* Deterioration in Washington-Beijing relations adds
pressure

By Naveen Thukral
SINGAPORE, July 23 (Reuters) - Oil prices lost more ground
on Thursday, with the market weighed down by a surprise increase
in U.S. crude oil reserves as the coronavirus pandemic hits fuel
consumption.
U.S. crude and distillate inventories rose unexpectedly and
fuel demand slipped in the most recent week, the Energy
Information Administration said on Wednesday, as a sharp rise in
coronavirus cases has started to hit U.S. consumption.
Brent crude LCOc1 fell 4 cents, or 0.1%, to $44.25 a
barrel by 0026 GMT while U.S. West Texas Intermediate (WTI)
crude CLc1 slid 6 cents, or 0.1%, to $41.84 a barrel.
"Normally inventories of fuel would be heavily drawn upon,
but the surge in COVID-19 case numbers has stymied the
recovery," ANZ said, referring to usual demand during the peak
U.S. summer driving season.
Crude inventories USOILC=ECI rose by 4.9 million barrels
in the week to July 17 to 536.6 million barrels, compared with
expectations in a Reuters poll for a 2.1 million-barrel drop.
Production rose to 11.1 million barrels per day, up by 100,000
barrels per day. The United States reported more than 1,000 deaths from
COVID-19 on Tuesday, according to a Reuters tally, marking the
first time since June 10 the nation has surpassed that grim
milestone, as California closed in on passing New York in total
infections. President Donald Trump said the outbreak would probably
worsen before it got better, a shift from his previously robust
emphasis on reopening the economy.
A fresh dispute between Washington and Beijing put further
pressure on prices.
The United States gave China 72 hours to close its consulate
in Houston amid accusations of spying, marking a dramatic
deterioration in relations between the world's two biggest
economies. Economic data from Japan, the world's fourth-largest oil
consumer, also weighed on prices. Factory activity contracted
for a 15th straight month in July, indicating that lower
economic activity due to the pandemic is extending into the
third quarter. The oil market is likely to take direction from consumer
confidence data expected from Europe later in the day.