Oil prices fall as United States fuel demand remains weak

Gloomy forecasts over economic impact of pandemic weighs on crude prices

Brent crude futures were up almost 1.7%, or 59 cents to $36.12, adding to a 1.1% gain on Monday in thin holiday trading. US West Texas Intermediate (WTI) crude rose 90 cents, or 2.7 per cent, to settle at US$33.71.

Refiners are buying on hopes of a fuel demand recovery as more countries ease coronavirus restrictions, and on anticipation that crude prices and freight rates may rise further, they said, although refining margins remained weak, limiting refiners' ability to raise output.

Data from the USA industry group API showed crude stocks rose by 8.7 million barrels in the week to May 22, compared with analysts' expectations for a draw of 1.9 million barrels.

With WTI holding above $30, OPEC+ will be closely watching to see whether the USA oil shale oil producers, who have breakeven prices in the high $20 and low $30 dollar range, step up production.

Oil prices fell on Wednesday after United States president Donald Trump said he was working on a strong response to China's proposed security law in Hong Kong.

Lion attack in Australia leaves zookeeper badly injured
The woman suffered face and neck injuries on Tuesday at Shoalhaven Zoo, about 150km (90 miles) south of Sydney . In 2014, a crocodile dragged a male handler into the water during a school holiday feeding show.

Rising U.S. -China tensions, between the world's largest oil consumers, over moves by Beijing to impose security legislation on Hong Kong also fueled concerns about the outlook for demand.

"A surprise to consensus API (American Petroleum Institute) inventory build (data) and fear of Russian Federation turning up production weighs on oil prices, " said Stephen Innes, Chief Global Markets Strategist at AxiCorp.

Thursday's Energy Information Administration data, which showed USA crude oil and distillate inventories rose sharply last week, also provided signs of hope as the delivery hub for WTI futures contracts in Cushing, Oklahoma posted another large decline in storage.

The market was buoyed by comments from Russian Federation reporting its oil output had almost dropped to its target of 8.5 million barrels per day (bpd) for May and June under its supply cut deal with the Organization of the Petroleum Exporting Countries (OPEC) and other leading producers, a grouping known as OPEC+.

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