Oil prices rose Wednesday on a steep drop in U.S. crude stockpiles, but coronavirus cases in the continue to soar around the country.
The Energy Information Administration reported a 7.2 million-barrel drop in crude supplies and a 1.2 million-barrel increase in gasoline supplies.
Analysts polled by S&P Global Platts expected both crude and gasoline supplies to have fallen by 2.7 million barrels.
The American Petroleum Institute, an industry group, said late Tuesday that crude stockpiles fell by 8.2 million barrels and gasoline stockpiles fell by 2.5 million barrels.
EIA also said Wednesday that domestic production was flat vs. the prior week at 11 million barrels per day.
U.S. benchmark crude oil prices pared earlier gains but were up 1.1% at $39.71 per barrel. Brent halved its rally to 0.9% at $41.65 per barrel.
Exxon Mobil (XOM) shares reversed lower to dip 0.4% on the stock market today. Chevron (CVX) gave up its gains to trade flat. Among top shale producers, EOG Resources (EOG) edged up 0.3%, and Parsely Energy (PE) added 1%.
Pandemic Looms Over Oil Prices
But coronavirus cases are surging in the U.S., with more than 40,000 new cases reported for the fourth time in the past five days. Some states have scaled back reopening plans to curb the virus, threatening to knock oil prices back again.
Meanwhile, Americans are expected to travel less this summer, when oil prices typically rise as demand peaks.
AAA expects Americans to take 700 million trips this summer, down 15% from last year, and the first decline in summer travel since 2009. Car trips will account for the majority of trips with air travel down by 74% this summer over concerns bout spreading the virus.
Follow Gillian Rich on Twitter @IBD_GRich for energy news and more.
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