By Adam Claringbull
Investing.com – Oil was down on Wednesday morning in Asia amidst continuing global uncertainty. With COVID-19 cases rising across Europe and the U.S. death toll passing 200,000, oil took a backseat in morning trade. An unexpected rise in U.S. inventories also dampened interest.
Brent oil futures fell 0.65% to $41.45 by 12:31 PM ET (4:31 AM GMT) and WTI futures was down 0.80% to $39.48.
Concerns over expanded COVID-19 restrictions as global cases continue to rise gave pause to oil investors today. The U.S. has passed 200,000 COVID-19 deaths, and multiple European countries are looking at bringing in further restrictions, causing concerns over an ever greater drop in demand. The U.K. imposed stricter containment measures on Tuesday, with suggestions that the previous lockdown may need to be reinstated.
In the U.S., rising inventory numbers are also cause for concern for oil investors, with the American Petroleum Institute (API) having predicted a 4 million-barrel drop in crude oil supply against an actual draw of 691,000 barrels. The latest draw numbers helped keep WTI futures below the $40 mark, continuing a lackluster run.
The U.S. Federal Reserve Chairman Jerome Powell warned on Tuesday that the economy still had a long road ahead of a full economic recovery and required further support, with Chicago Fed President Charles Evans joining him in voicing concerns about long-term economic worries and also the need for further government support.
The Libyan National Oil Company has said that it expects output to reach above 250,000 barrels per day (bpd) at some point next week. The country also expects to resume exports from the Zueitinia terminal due to lowered security threats.
Investors are now awaiting data from the U.S. Energy Information Administration (EIA), due to be released later in the day.