Oil stable at $43 as rise in coronavirus cases stall economic recovery

Oil prices were steady on Wednesday, as rising US crude inventories and an increase in US coronavirus infections put the brakes on a recent recovery sparked by easing lockdowns.

Brent crude futures rose 9 cents to $43.17 a barrel by 1340 GMT. US West Texas Intermediate (WTI) crude futures were up 8 cents at $40.70 a barrel.

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Both benchmarks are set for a fourth session of daily percentage changes of less 1 percent in either direction, shrugging off news that OPEC member Libya was adding to global supplies by reopening its Es Sider oil terminal for exports.

The latest surge in US coronavirus cases, taking the US total above 3 million, has reduced hopes for a swift recovery in oil demand which has been hammered by the global lockdowns to prevent the virus spreading.

US crude oil inventories rose last week, although gasoline and distillate inventories fell more than expected, data from industry group the American Petroleum Institute showed.

“The search continues for a catalyst to break oil out of its range,” PVM analysts said, adding prices were holding steady “even as sentiment is sullied by renewed US glut fears.”

The US Energy Information Administration (EIA) said on Tuesday that US crude oil production is expected to fall by 600,000 barrels per day (bpd) in 2020, a smaller decline than the 670,000 bpd it forecast previously.

EIA crude stock data is due later on Wednesday.

Key ministers in OPEC+, which includes OPEC, Russia and other producers, were due to hold talks next week about their deal on record output cuts that will run to the end of July and then start tapering.

In addition to Libya, Abu Dhabi National Oil Co (ADNOC) plans to boost oil exports in August, suggesting OPEC+ countries are preparing to ease output cuts, sources told Reuters.

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However, the data included only the first full week of the lockdown and economists expect subsequent damage to be considerably worse for the second quarter.

Another contraction would place Britain in a technical recession.

Since the crisis began, the Bank of England has pumped cash stimulus worth £300 billion into Britain’s virus-hit economy and slashed its main interest rate to a record-low 0.1 percent -- moves aimed at propping up businesses and saving jobs.

Experts estimate the total cost of state emergency measures meanwhile could run as high as £300 billion.