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Gulf Today Report

Oil prices dipped on Wednesday as US oil inventories advanced increasing worries for slow demand but investors remain optimistic due to COVID-19 vaccine development.

Brent crude futures slipped 18 cents, or 0.4%, to $48.66 a barrel by 0450 GMT, having gained 5 cents the previous day. US West Texas Intermediate (WTI) crude futures dropped 15 cents, or 0.3%, to $45.45, after shedding 16 cents on Tuesday.

Chiyoki Chen, chief analyst at Sunward Trading said: "the build in US crude inventories raised a sense of caution among investors and prompted them to unwind long positions ahead of the EIA data." 

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On Tuesday, Britain began vaccinating its residents.

Despite the effect of the restrictions imposed in California, Germany and South Korea, the vaccine news helped in reducing investors fears. 

Markets remain hopeful that the vaccine will drive economic recovery.

The EIA said on Tuesday that US crude oil production is expected to slide next year by 240,000 barrels per day (bpd) to 11.10 million bpd, a smaller decline than its previous forecast for a slide of 290,000 bpd.