Oil falls amid concerns about new viral outbreaks, rise in inventories

TOKYO, May 13 (Reuters) - Oil prices fell in early Asian
trading on Wednesday after industry data showed a rise in U.S.
crude inventories and concerns mount about a possible second
wave of the coronavirus pandemic in countries easing lockdowns.
Traders shrugged off a further call by Saudi Arabia for
larger production cuts to balance the market following a
virus-induced demand slump, after OPEC's biggest producer said
earlier this week it planned to add to cut again.
Brent crude LCOc1 was down 49 cents, or 1.6%, at $29.49 by
0034 GMT, having risen 1.2% on Tuesday. U.S. crude was down 41
cents, or 1.6%, at $25.37 a barrel, after jumping nearly 7% in
the previous session.
"While the market feels more comfortable on the supply side
of the equation, on the demand side, the focus will continue to
revolve around the risks of easing lockdowns," said Stephen
Innes, chief markets strategist at AxiCorp.
U.S. infectious disease expert Anthony Fauci on Tuesday told
Congress that easing coronavirus lockdowns may set off new
outbreaks of the illness, which has killed 80,000 Americans and
badly damaged the world's biggest economy. New outbreaks have been reported in South Korea and in
China, where the health crisis started before spreading around
the world, prompting governments to lock down billions of
people, devastating economies and demand for oil. On the supply side, Saudi Arabia's cabinet has urged OPEC+
countries to reduce oil output further to restore balance in
global crude markets, the country's state news agency reported
early on Wednesday. On Monday, Saudia Arabia said it would add to planned cuts
by reducing production by a further 1 million barrels per day
(bpd) next month, bringing output down to 7.5 million bpd.
The Organization of the Petroleum Export Countries (OPEC)
and other producers such as Russia - a group known as OPEC+ -
agreed to cut output by 9.7 million barrels per day (bpd) in May
and June, a record reduction, in response to a 30% fall in
global fuel demand.
In the United States, inventories of crude oil rose by 7.6
million barrels last week to 526.2 million barrels, against
analysts' expectations for an increase of 4.1 million barrels.
API/S
Official storage data from the U.S. Energy Information
Administration is due later on Wednesday. EIA/S