Oil prices ease as rising Covid-19 cases outweigh vaccine optimism

Oil futures dipped on Thursday as a surge in coronavirus cases and tighter economic restrictions around the globe weighed on fuel demand expectations, also dragging down equities globally.

Brent crude futures were down 27 cents to $44.07 a barrel by 0911 GMT. U.S. West Texas Intermediate crude slipped 43 cents to $41.39 a barrel. A rising dollar made oil more expensive for holders of other currencies.

But Brent’s six-month contango, a market structure implying current oversupply, was at its shallowest in over four months on Thursday, suggesting concerns over a glut are easing somewhat.

U.S. crude inventories rose 768,000 barrels last week, less than the 1.7 million barrels analysts expected in a Reuters poll, government data showed. Distillate stockpiles, which include diesel and heating oil, fell by 5.2 million barrels, far exceeding expectations.