Oil prices edge higher on surprise U.S. stock drawdown, but demand concerns linger

SEOUL, May 14 (Reuters) - Oil prices crept up on Thursday,
supported by a surprise decline of U.S. crude inventories, but
gains were capped by worries that a potential second wave of the
coronavirus pandemic might trigger fresh lockdowns and slam fuel
demand once again.
Brent crude futures LCoc1 rose 6 cents, or 0.2%, to $29.25
per barrel at 0045 GMT. U.S. West Texas Intermediate (WTI) crude
futures CLc1 were up 8 cents, or 0.3%, to $25.37 a barrel.
Crude stocks in the United States had billowed since
mid-January on falling fuel demand around the world as a result
of the pandemic.
But U.S. crude inventories fell by 745,000 barrels to 531.5
million barrels in the week to May 8, the Energy Information
Administration said on Wednesday, comforting the market after
analysts in a Reuters poll had forecast a 4.1 million barrel
increase. EIA/S
"U.S. commercial crude stocks unexpectedly fell last week,
adding to growing evidence that the U.S. oil market has passed
the worst," Capital Economics said in a note.
Prices have risen in the past two weeks as some countries
relaxed coronavirus restrictions and lockdowns, giving hope for
a pickup in fuel demand.
The mood in the market has also been boosted major oil
producers' commitments to curb output to help restore
supply-demand balance.
The Organization of Petroleum Exporting Countries (OPEC) and
its allies including Russia agreed in April to curtail their
production by 9.7 million barrels per day (bpd) in May and June.
Saudi Arabia, de facto leader of OPEC, also said it would
cut its oil output by an additional 1 million bpd to 7.5 million
bpd starting in June.
In Europe, demand for petrol and diesel has begun a slow
recovery as governments eased coronavirus curbs and vehicle
traffic increased in major cities, according to data provided to
Reuters by location technology company TomTom. However, concerns over a possible second wave weighed on
prices as new coronavirus cases have emerged in South Korea and
China after they softened restrictions.