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Gulf Today Report

Oil prices decline on Wednesday as US crude oil inventories gains and countries continue to impose tighter restrictions.

Brent crude futures fell 11 cents, or 0.2%, to $50.65 a barrel at 04:21 GMT, while US West Texas Intermediate (WTI) crude futures fell 9 cents, or 0.2%, to $47.53 a barrel.

Edward Moya, senior market analyst at OANDA said: "Crude prices are slightly softer after the API (American Petroleum Institute) inventory report posted a second consecutive build."

According to industry group API, US inventories increased by 2 million barrels in the week to about 495 million barrels. 

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Analysts are anticipating a draw of 1.9 million barrels, according to official government data scheduled later today.

Although the vaccine is being rolled out in different part of the world, it won't quickly revive the low oil demand, the International Energy Agency (IEA) said on Tuesday.

The IEA has toned down its estimates for oil demand this year by 50,000 barrels per day (bpd) and 170,000 bpd for next year due to scarcity of jet fuel.

In a note, FGE analysts said: "On the demand side, the biggest near-term downside risk to oil demand expectations is the United States, predominately due to persistent weaknesses in US gasoline demand, given the current trajectory of COVID-19 in the country."