Oil prices inched higher on Wednesday, paring earlier losses, as positive news on COVID19 vaccines lifted investor hopes for a recovery in fuel demand, outweighing concerns over an unexpected jump in U.S. oil inventories last week.
Brent crude futures rose 11 cents, or 0.2, to 48.95 a barrel by 0746 GMT, having gained 5 cents the previous day. U.S. West Texas Intermediate WTI crude futures climbed 9 cents, or 0.2, to 45.69, after shedding 16 cents on Tuesday.
The American Petroleum Institute API said on Tuesday that U.S. crude oil, gasoline and distillate stocks rose sharply last week, with crude stocks jumping by 1.14 million barrels, against analyst forecasts in a Reuters poll for a draw of 1.42 million barrels.
Official weekly oil data from the U.S. Energy Information Administration EIA is due on Wednesday.
The build in U.S. crude inventories raised a sense of caution among investors and prompted them to unwind long positions ahead of the EIA data in early trade, said Chiyoki Chen, chief analyst at Sunward Trading.
But brighter news about progress in vaccines development and hopes for U.S. economic stimulus by Presidentelect Joe Biden kept overall market sentiment upbeat, he said, predicting Brent and WTI will head toward 50 a barrel later this month.
Britain began massvaccinating its population on Tuesday in a global drive that poses one of the biggest logistical challenges in peacetime history.
Pfizer cleared another hurdle on Tuesday when the U.S. Food and…