Oil slips away from five-month highs

Tokyo — Oil prices fell for the first time in four days on Wednesday, pulling back from as much as five-month highs as mounting coronavirus cases worldwide and in the US undercut market confidence in a pickup in fuel demand.

Brent crude was down 16c, or 0.4%, at $44.27 a barrel by 1.17am GMT. It finished 0.6% higher on Wednesday — the highest close since March 6.

West Texas Intermediate (WTI) oil was down 17c, or 0.4%, at $41.53 a barrel. The contract ended Tuesday trading 1.7% higher, its highest close since late July.

Coronavirus cases continue rising in the US, and deaths are at more than a 1,000 a day, while dozens of states have had to pause or scale back plans to reopen their economies.

Still, talks between Democrats in Congress and the White House on a new package of coronavirus relief started moving in the right direction, though the two sides remain far apart.

US factory data this week also showed an improvement in orders, which some analysts saw as offering relief to the concern about risks to any recovery.

“Oil could be ready to test the upper boundaries of its recently tight range,” said Edward Moya, senior market analyst, at Oanda.

In the near term, though, traders shrugged off data showing a big fall in crude oil inventories in the US, normally enough to spur a rally in prices.

Crude inventories were down by 8.6-million barrels in the week to August 1 to 520-million barrels, compared with analysts’ expectations for a drop of 3-million barrels.

Official figures from the US department of energy are due out later on Wednesday.

Reuters