* U.S. crude stockpile drop offset by big gasoline build
* Nowhere as worrisome for COVID-19 infections as
S.America-PAHO
* World powers and Iran hold talks on nuclear deal
(New throughout; updates prices, market activity and comments
to settlement)
By Laila Kearney
NEW YORK, April 7 (Reuters) - Oil futures inched higher on
Wednesday on an improving global economic outlook, but gains
were capped by rising gasoline inventories and fears that new
coronavirus outbreaks will weaken a global recovery in fuel
demand.
Brent crude futures LCOc1 settled at $63.16 a barrel, up
42 cents, or 0.7%. U.S. West Texas Intermediate CLc1 crude
settled at $59.77 a barrel, gaining 44 cents, or 0.7%.
U.S. crude stocks fell 3.5 million barrels last week, but
gasoline inventories jumped 4 million barrels, the Energy
Information Administration (EIA) said, compared with
expectations in a Reuters poll for a 221,000-barrel gasoline
drop. EIA/S
"If you don't need to make gasoline, then you don't need to
use more crude oil," said Bob Yawger, director of energy futures
at Mizuho Securities.
Prices drew support when the Federal Reserve released
minutes from last month's meeting that reinforced the U.S.
central bank's position that it will refrain from raising rates
anytime soon, boosting the fuel demand outlook.
The International Monetary Fund on Tuesday said
unprecedented public spending to fight COVID-19 would push
global growth to 6% this year, a rate not achieved since the
1970s, which also helped the fuel demand outlook and supported
prices.
However, rising COVID-19 cases in the Americas, which
accounted for more than half of all coronavirus-related deaths
last week, capped gains. "There's concern globally with the rise in COVID-19 cases
again and now Canada staring down a third wave, the market
continues to be haunted by these demand issues from the
outbreaks," said John Kilduff, partner at Again Capital in New
York.
Also, global crude supplies could increase as Iran and major
world powers took steps toward reviving an agreement that froze
Iran's nuclear weapons development. The parties agreed to form
working groups to discuss the possibility of reviving the 2015
deal that could lead to Washington lifting sanctions on Iran's
energy sector.
"Iran is the single largest upside supply risk for the oil
market," said Stephen Brennock of oil brokerage PVM.
Oil prices dropped earlier this week after the Organization
of the Petroleum Exporting Countries (OPEC) and allies, a group
known as OPEC+, agreed to gradually ease oil output cuts from
May.