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UPDATE 7-Oil rises as hefty U.S. crude draw outweighs COVID-19 demand concerns

CoronavirusJan 27, 2021 17:42
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* U.S. crude stocks fall 10 mln bbls to lowest since March
-EIA
* China posts lowest daily COVID-19 cases in more than 2
weeks

(New throughout, updates prices, market activity and comments;
new byline, changes dateline, previous LONDON)
By Laila Kearney
NEW YORK, Jan 27 (Reuters) - Oil prices ticked up on
Wednesday as a massive drawdown in U.S. crude inventories
countered persistent concerns about the coronavirus pandemic
weakening fuel demand.
U.S. crude oil stocks dropped 9.9 million barrels last week
to their lowest since March at 476.7 million barrels, the Energy
Information Administration said, compared with analysts'
expectations in a Reuters poll for a 430,000-barrel rise.
EIA/S
Brent crude LCOc1 gained 38 cents, or 0.7%, to $56.29 a
barrel by 11:14 a.m. EST (1614 GMT). U.S. West Texas
Intermediate (WTI) crude CLc1 rose 48 cents to $53.09.
"The market was led up by a significant draw in crude oil as
the refining industry continues to turn the crude oil surplus
into refined products," said Andrew Lipow, president Lipow Oil
Associates in Houston.
U.S. gasoline stocks jumped 2.5 million barrels to 247.7
million barrels, the EIA said, more than forecasts for a 1.8
million-barrel build.​
Oil prices have recovered from record lows in April due to a
demand recovery, particularly in China, and huge supply cuts by
the Organization of the Petroleum Exporting Countries and its
allies, known as OPEC+.
"Oil continues consolidating," said Jeffrey Halley of
brokerage OANDA. "The Saudi Arabian cuts, OPEC+ compliance above
85% and an insatiable demand from Asia means that oil has seen
its cyclical lows for 2021."
Still, the number of global coronavirus cases has surpassed
100 million as infections rise in Europe and the Americas, and
Asia scrambles to contain fresh outbreaks, limiting oil prices.
China, the second-largest oil consumer, has recently seen a
coronavirus resurgence, but official Chinese data showed 75 new
confirmed cases of COVID-19 on Wednesday, the lowest daily rise
since Jan. 11.
After the U.S. oil inventory report, the market's focus
shifts to the results of the U.S. Federal Reserve's two-day
policy meeting later on Wednesday. Analysts expect the Fed to
stick to its dovish tone to help speed the economic recovery.


UPDATE 7-Oil rises as hefty U.S. crude draw outweighs COVID-19 demand concerns
 

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