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Oil steadies as COVID-19-induced demand worries persist - Reuters

LONDON (Reuters) - Oil rose about 1% on Thursday after early declines on a weaker dollar and U.S. inventory drawdowns, but delays to vaccine rollouts and fresh travel curbs to prevent new coronavirus outbreaks kept further gains at bay.

FILE PHOTO: Crude oil storage tanks are seen in an aerial photograph at the Cushing oil hub in Cushing, Oklahoma, U.S. April 21, 2020. REUTERS/Drone Base

Brent crude futures were up 53 cents at $56.34 a barrel by 1454 GMT, having hit a session low of $55.31.

U.S. West Texas Intermediate (WTI) crude futures were up 52 cents at $53.37 after dropping as low as $52.22.

Oil prices were supported by data on Wednesday showing a huge 10 million barrel decline in U.S. crude inventories last week, which analysts said was because of a pick-up in U.S. crude exports and a drop in imports. [EIA/S]

“The draw was a big relief for inventories, especially as it followed a week of builds, putting traders at ease that supply doesn’t overwhelm demand for the time being,” Rystad Energy’s Louise Dickson said.

The U.S. dollar index flipped into negative territory after earlier gains, which also helped support oil prices. Buyers using other currencies pay less for dollar-priced oil when the greenback falls.

The U.S. economy in 2020 contracted at its sharpest pace since 1946 as the pandemic depressed consumer spending and business investment, pushing millions of Americans out of work and into poverty, data showed on Thursday.

Demand concerns weighed on sentiment, however, preventing further price gains.

Stricter vaccine checks by the European Union and delivery hold-ups from AstraZeneca and Pfizer have slowed the rollout of shots.

In China, the world’s second-largest oil consumer, a surge in coronavirus cases has led to travel restrictions ahead of the Lunar New Year, normally the busiest travel season of the year.

The Chinese Ministry of Transport has forecast the number of trips that will be taken will rise 15% from last year, when the virus was raging, but is still likely to be down 40% from 2019.

Additional reporting by Shu Zhang in Singapore and Sonali Paul in Melbourne; Editing by Barbara Lewis, David Goodman, Alexandra Hudson

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