Oil ticks up despite big build in US inventories

Oil prices were modestly up on Thursday morning in Asia even after a surprise jump in crude inventories in the US that saw prices fall from four-month highs in New York on Wednesday.

The US Energy Information Administration (EIA) reported a big build in crude oil inventories of 4.892 million barrels, far in excess of the forecasted draw of 2.088 million barrels.

“Normally inventories of fuel would be heavily drawn upon, but the surge in Covid-19 case numbers has stymied the recovery,” ANZ said in a note. Demand is usually at its peak during the U.S. summer driving season.

Brent oil futures rose 0.14% to $44.35 by 11:23 PM ET (4:23 AM GMT) and WTI futures rose 0.12% to $41.95.

The Covid-19 pandemic continues to keep economic activity and oil consumption in check. The number of cases globally has topped the 15 million mark while the US state of California overtook New York to become the US state with the most confirmed cases and deaths in Texas also reached a new high.

Tensions between the China and US have not helped investor confidence in future economic growth. Ratcheting up tensions, the US ordered China close its consulate in Houston, Texas, by Friday. US Secretary of State Mike Pompeo said the decision was taken because of China’s intellectual property theft. China’s foreign ministry condemned the move, calling it a “political provocation” on Twitter.

By Investing.com: https://www.investing.com/news/commodities-news/oil-ticks-up-despite-big-build-in-us-inventories-2237941