By Gina Lee
Investing.com – Oil was down on Wednesday morning in Asia, with a smaller-than-expected draw in U.S. crude inventories and warning bells over fuel demand recovery contributing to a retreat from the black liquid.
Data released by the U.S. Energy Information Administration (EIA) on Wednesday showed that fuel demand was down 14% from the year-earlier period over the last four weeks.
EIA also reported a 1.632 million-barrel draw in U.S. crude stockpiles, the fourth straight week of draws. But the draw was smaller than the forecasted 2.670 million-barrel draw prepared by Investing.com, as well as the previous week’s 4.512 million-barrel draw.
The American Petroleum Institute (API) reported a draw of 4.264 million barrels the day before.
Brent oil futures were down 0.79% to $45.01 by 11:46 PM ET (4:46 AM GMT) and WTI futures fell 0.95% to $42.70. WTI futures rolled over to the October contract on Wednesday.
Some investors expect continuing draw in stockpiles.
“We expect that total crude stocks will continue to head towards their five-year average in the weeks ahead as U.S. production remains subdued,” Capital Economics analysts said in a note.
Meanwhile, Saudi energy minister Prince Abdulaziz bin Salman predicted that global oil demand should recover to pre-COVID-19 levels as soon as the fourth quarter during Wednesday’s OPEC+ joint ministerial monitoring committee meeting.
The meeting, which was reviewing compliance with production cuts while leaving output reductions unchanged, also saw the minister urge OPEC+ members to comply with the body’s deal to cut output.
But a draft OEPC+ statement also reportedly warned that fresh COVID-19 outbreaks in several countries such as South Korea, poses a major threat to fuel demand recovery. South Korea reported 288 cases as of midnight on Wednesday.