Oil slips more than 1% despite surprise US crude stock drawdown

NEW YORK: Oil prices fell more than 1 per cent on Wednesday despite the first decline in US crude inventories since January, as markets were affected by a solemn address from US Federal Reserve chairman warning that economic recovery from the coronavirus pandemic would take many months.

The markets have rallied in the last several days on optimism that fuel demand destruction has bottomed out and producers have aggressively cut production to deal with the supply glut due to the pandemic. However, with governments signaling a long period before activity rebounds, risk assets like stocks and oil slipped on Wednesday.