By Geoffrey Smith
Investing.com -- Crude oil prices drifted within narrow ranges in early trade in New York on Wednesday, ahead of the release of U.S. government data on inventories for last week, which is due at 10:30 AM ET.
By 9:15 AM ET (1315 GMT), U.S. crude futures were up 0.1% at $40.64 a barrel, having briefly flirted again with the $40 level after the American Petroleum Institute surprisingly reported a build of 2.0 million barrels in U.S. crude stocks last week. Expectations had been for a modest draw.
The international benchmark Brent was up 0.2% at $43.16 a barrel.
The negative impact of the API's headline figure was softened slightly by the fact that gasoline inventories fell, soothing fears that the spread of the coronavirus across some of the U.S.'s most populous states would have an immediate impact on fuel demand.
Gasoline RBOB Futures, which had ticked up on the back of the API report, were down 0.4% at $1.2699 a gallon.
Coronavirus impacts remain on the minds of traders, however. The U.S. posted a new record high for new cases of Covid-19 on Tuesday, at over 60,000. More than 10,000 of those came in Texas alone. With hospitals in Florida, Texas and Arizona warning that they are approaching capacity, the threat of new measures to keep people at home is only growing.
"The critical situation in the (U.S.), and other nations, is what keeps prices below $45 dollars in the first place," said Rystad Energy oil markets analyst Louise Dickson in emailed comments. "If crude stocks are growing now, while restrictions are loose, traders worry about what will happen to demand in the case serious lockdowns come back again. Stocks are already at quite high levels."
Further afield, news agencies reported earlier Wednesday that Libya, whose output has been shut off from world markets for six months by its civil war, had lifted the force-majeure contract on loadings from its main export terminal. However, it wasn't clear whether crude is actually flowing to the terminal, or whether a planned loading was merely being taken from storage.
Other shut-in production is also slowly starting to return to the market. Bloomberg reported on Tuesday that Canadian producers had restarted some 20% of what they had shut in at the depths of the market panic in the spring.