Oil rose after its best quarter in almost three decades following a report pointing to the first drop in U.S. crude stockpiles since May.

Futures in New York climbed toward $40 a barrel after closing down 1.1% on Tuesday. The industry-funded American Petroleum Institute said that inventories shrunk by 8.16 million barrels last week, according to people familiar with the data. That would be the largest draw this year if confirmed by Energy Information Administration figures due later on Wednesday.

While the stockpiles data spurred some optimism that oil consumption was improving, the demand outlook for the world’s largest economy remains uncertain amid a resurgence in the coronavirus. The U.S. is “going in the wrong direction” in its effort to contain the outbreak and daily case counts could more than double to 100,000 if behaviors don’t change, infectious-disease expert Anthony Fauci warned on Tuesday.

Oil surged 92% last quarter, the most since the three months through September 1990, but gains have slowed in recent weeks. Supply cuts from the OPEC+ alliance and elsewhere have been the main driver behind the rebound. The demand outlook, however, remains cloudy as virus cases keep rising in some parts of the world and less travel curbs demand for transport fuels.

West Texas Intermediate crude for August delivery rose 0.8% to $39.57 a barrel on the New York Mercantile Exchange as of 8:26 a.m. in Singapore after rallying 11% in June. Brent for September delivery added 0.9% to $41.51 on the ICE Futures Europe exchange. The August contract closed up 1.3% as it expired on Tuesday.

Source : Bloomberg