Oil prices rose on Wednesday as an unexpected decrease in US crude oil inventory signaled a potential rise in US oil demand.
International benchmark Brent crude was trading at $40.27 per barrel at 0654 GMT for a 1.41% increase after closing Tuesday at $39.71 a barrel.
American benchmark West Texas Intermediate was at $38.20 per barrel at the same time for a 1.43% increase after it ended the previous session at $37.66 a barrel.
Oil prices increased following the American Petroleum Institute’s release of its estimation of a fall of 8 million barrels in US crude oil inventories last week, compared to the market expectation of 890,000 barrels increase.
Price increases were also supported with optimism over an extension of the OPEC+ oil production cut agreement at their next meeting between Nov. 30 and Dec. 1 when they are set to agree on a policy for 2021 onwards.
Oil markets are expecting that the OPEC+ group, which is currently reducing production by 7.7 million barrels per day, will keep the current output production cuts level next year.
However, the novel coronavirus (COVID-19) outbreak is still putting downward pressure on oil prices, as European countries announce lockdowns and restrictions to fight the second wave of the pandemic.
France and the UK announced nationwide lockdowns and other European countries, including Austria, Germany, Italy and Spain brought further strict restrictions to curtail the spread of the outbreak.
According to the latest data from Johns Hopkins University, the number of cases has now reached over 47.4 million worldwide.
The markets are also focused on the outcome of the US presidential election, the run-up of which is escalating uncertainty and driving prices down.
By Firdevs Yuksel