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Oil Maintains Upward Momentum but Virus Concerns Cap Gains

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Crude climbed on Wednesday after industry data showed U.S. oil inventories declined more than expected and OPEC raised its outlook for oil demand, but gains were capped by worries about the coronavirus and by rising supplies of the energy resource.

Brent crude futures rose 42 cents, or 0.6, to 64.09 a barrel at 0421 GMT, after gaining 39 cents on Tuesday.

U.S. West Texas Intermediate WTI crude futures added 40 cents, or 0.7, to 60.58 a barrel, following Tuesdays rise of 48 cents.

Signs of a strong economic recovery in China and the United States have underpinned recent oil price gains, but concerns over stalled vaccine rollouts worldwide and soaring COVID19 infections in India and Brazil have capped gains.

Continuing setbacks on vaccine rollouts and global cases nearing Januarys peak is likely to hold a firm cap on crudes ascent in the short term. At the same time, persistent optimism over a U.S. recovery and the world being on the cusp of emerging out of the COVID crisis is holding a floor, said Vandana Hari, energy analyst at Vanda Insights.

A weakening U.S. dollar also provided a mild upward push in recent days but theres been no major bullish impetus to free crude from its narrow trading range, she said.

A lower greenback, which hit threeweek lows on Wednesday, makes crude purchases cheaper for countries using other currencies.

The Organization of the Petroleum Exporting Countries OPEC tweaked up its forecast on Tuesday for world oil demand growth this year,…

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