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Oil prices lower on global COVID worries, U.S. inventories

Oil futures traded lower Tuesday as traders grappled with rising COVID-19 infections in Asia, while awaiting official data on U.S. crude supply levels after a trade group reported an unexpected rise in inventories.

West Texas Intermediate crude for June delivery CL.1, -1.91% CLM21, -2.27% fell 91 cents, or 1.5%, to $61.76 a barrel on the New York Mercantile Exchange. June Brent crude BRN00, -1.92% BRNM21, -1.92%, the global benchmark, fell 88 cents, or 1.3%, to $65.69 a barrel on ICE Futures Europe.

Crude was struggling “amid rising COVID-19 infection numbers in some regions (India stands out as particularly hard hit) and U.S. [American Petroleum Institute] data, indicating a build in crude and distillates (though a draw in gasoline),” said Stephen Innes, chief global market strategist at Axi, in a note.

India reported a record number of cases again on Wednesday, counting more than 200,000 for a seventh straight day. The country’s hospitals are reportedly filling rapidly, with the health system running out of ICU beds and running low on oxygen. News reports said Japanese officials were considering ordering a state of emergency for Tokyo and Osaka due to surging COVID-19 cases.

The American Petroleum Institute reported late Tuesday that U.S. crude supplies rose by 436,000 barrels for the week ended April 16, according to sources. The data also reportedly showed gasoline stockpiles fell by 1.6 million barrels, while distillate inventories edged up by 655,000 barrels. Crude stocks at the Cushing, Okla., storage hub, meanwhile, were down by 1.3 million barrels for the week, sources said.

More closely watched inventory data from the Energy Information Administration will be released Wednesday morning. On average, the EIA is expected to show crude inventories down by 4.4 million barrels, according to survey of analysts conducted by S&P Global Platts. It also forecast an inventory climb of 800,000 barrels for gasoline and supply decrease of 1.3 million barrels for distillates.

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