Oil edged lower as the re-imposition of anti-virus measures in parts of the U.S. was partially offset by a bigger-than-expected draw in American crude stockpiles and plunging output from OPEC producers.

Futures in New York traded near $40 a barrel dipped after rising 1.4% Wednesday as the Energy Information Administration reported U.S. inventories shrunk by 7.2 million barrels last week, the most this year. Sentiment was also aided by a survey showing OPEC output fell to the least since 1991 last month.

The coronavirus continues to run rampant through the world’s largest economy, with cases surging in California, Texas and Florida, the three biggest states. Many areas have now paused or reversed re-opening measures, weighing on energy demand. There was some optimism on the vaccine front, however, with a successful early trial from Pfizer Inc. and BioNtech SE.

Oil has traded in a fairly narrow range around $40 this week as reductions in supply from OPEC+ and elsewhere are balanced by consumption that’s still well below pre-virus levels and at risk of regressing. Indian diesel sales were still 17% below year-earlier levels last month. Demand growth for refined oil products will never get back to where it was before the pandemic as fewer people fly and use their cars, according to Citigroup Inc. Indian

West Texas Intermediate for August delivery fell 0.7% to $39.53 a barrel on the New York Mercantile Exchange as of 8:47 a.m. in Singapore. Brent for September settlement dropped 0.7% to $41.73 a barrel on the ICE Futures Europe exchange after rising 1.8% on Wednesday.

Source : Bloomberg