Oil prices bolstered by bigger-than-expected drop in U.S. crude stocks

TOKYO (Reuters) – Oil prices moved higher on Wednesday after an industry report showed that U.S. inventories of crude fell more than analysts had expected, bolstering hopes that fuel demand in the world’s biggest economy can weather the coronavirus pandemic.

Brent crude was up 15 cents, or 0.3%, at $44.65 a barrel by 0206 GMT, after falling around 1% on Tuesday.

West Texas Intermediate oil was up 9 cents, or 0.2%, at $41.70 a barrel, having dropped 0.8% in the previous session.

“Oil prices are rising as the crude demand outlook improves,” said Edward Moya, senior market analyst at OANDA.

The American Petroleum Institute said on Tuesday that crude stocks fell by 4 million barrels last week, more than analysts’ expectations of a 2.9 million-barrel draw. Official government data is due on Wednesday. [EIA/S] [API/S]

Still, growing uncertainty over a stalemate in Washington in talks for a stimulus package to support recovery from the deepest impact of the pandemic may weigh on prices looking ahead.

(Reporting by Aaron Sheldrick; Editing by Kenneth Maxwell)