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Crude steady as rising European COVID-19 cases offset U.S. oil stock draw

NEW YORK (Reuters) - Oil prices were steady on Thursday as a new wave of coronavirus cases in Europe led several countries to reimpose travel restrictions, offsetting a bullish drop in U.S. crude and fuel inventories.

FILE PHOTO: Oil pumps are seen, as oil and gas activity dips in the Eagle Ford Shale oil field due to the coronavirus disease (COVID-19) pandemic and the drop in demand for oil globally, in Karnes County, Texas, U.S., May 18, 2020. REUTERS/Jennifer Hiller

Brent futures LCOc1 settled 17 cents, or 0.4%, higher at $41.94 a barrel, while U.S. West Texas Intermediate (WTI) crude CLc1 gained 38 cents, or 1.0%, to end at $40.31.

That cut Brent's premium over WTI WTCLc1-LCOc1 to its smallest closing level since late May when WTI settled higher than Brent on one day.

“Oil prices (are) stable for now but downside pressure remains ... due to rising COVID numbers across Europe,” said Craig Erlam, senior analysts at OANDA.

Britain, Germany and France imposed new restrictions to stem the coronavirus spread - all factors affecting fuel demand.

Prices were also capped by data showing the number of Americans filing new claims for unemployment benefits unexpectedly increased last week, supporting views the economic recovery from the COVID-19 pandemic was running out of steam amid diminishing government funding.

"Oil prices are holding up pretty well despite the lack of additional U.S. government stimulus," Phil Flynn, senior analyst at Price Futures Group in Chicago said, noting the market received support from this week's U.S. oil inventory data and a rise in the stock market. .DJI.SPX

U.S. crude, gasoline and distillate inventories all fell last week, according to government data on Wednesday.

U.S. fuel demand, however, remains subdued as the pandemic limits travel. The four-week average gasoline demand last week was down 9% from a year earlier, government data showed.

Looking forward, a senior executive at U.S. oil producer ConocoPhillips COP.N said global demand will return to 100 million barrels per day and grow from there.

On the supply side, the market remains wary of a resumption of exports from Libya, although it is unclear how quickly it can ramp up volumes.

An oil tanker was loading a crude cargo on Thursday from one of three recently reopened Libyan terminals, with more loadings expected over the coming days.

Additional reporting by Ahmad Ghaddar in London, Sonali Paul in Melbourne and Koustav Samanta in Singapore; Editing by Marguerita Choy and Barbara Lewis

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