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Renewed worries over the COVID-19 pandemic, which has squeezed
demand and sent prices to record lows in April, capped gains
after reports this week of patients being re-infected, raising
concerns about future immunity.
Brent crude <LCOc1> slipped 14 cents, or 0.3%, to $45.72 a
barrel by 1050 GMT, while U.S. West Texas Intermediate crude
<CLc1> fell 17 cents, or 0.4%, to $43.18. Both benchmarks
settled at a five-month high on Tuesday.
"Oil traders will be preoccupied with the hurricane today," said
Tamas Varga of broker PVM. "Once the danger passes, demand
considerations will come into focus again."
The U.S. energy industry was preparing on Tuesday for a major
hurricane strike. Producers shut 1.56 million barrels per day
(bpd) of crude output, representing 84% of the Gulf of Mexico's
offshore production and close to the 90% outage that Hurricane
Katrina brought 15 years ago.
"We do see some support on the back of hurricane activity,"
Dutch bank ABN AMRO said in a report. "The threat of being
infected by the COVID-19 virus threatens a further recovery in
oil demand."
Oil was also boosted on Tuesday by U.S. and Chinese officials
reaffirming their commitment to a Phase 1 trade deal. Further
support came from American Petroleum Institute figures <API/S>
showing U.S. crude stocks fell more than expected.
A record oil output cut by the Organization of the Petroleum
Exporting Countries (OPEC) and allies including Russia has
helped to lift Brent from April's 21-year low below $16.
The U.S. government's Energy Information Administration report
at 1430 GMT will be in focus to see if it confirms the API
figures.
(Additional reporting by Jessica Jaganathan; Editing by David
Goodman)
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