Oil prices rose on Tuesday, supported by expectations of a recovery in fuel demand as coronavirus lockdowns ease, but a surprise build in U.S. crude inventories and worries about a second wave of infections capped gains.
Brent crude was up 28 cents, or 0.7%, at $41.90 a barrel by 0753 GMT, while U.S. West Texas Intermediate (WTI) crude was up 24 cents, or 0.6%, at $39.76 a barrel.
Oil prices have been supported by signs of a recovery in fuel demand as countries ease coronavirus lockdowns, with the United States and Europe gradually reopening their economies.
However, a surprise build in U.S. crude inventories last week and worries about a second wave of infections have weighed on prices.
U.S. crude inventories rose by 1.3 million barrels in the week to June 12, according to data from industry group the American Petroleum Institute (API). Analysts had expected a draw of 1.2 million barrels.
The U.S. Energy Information Administration (EIA) will release its official inventory data later on Tuesday.
The market is also keeping an eye on the Organization of the Petroleum Exporting Countries (OPEC) and its allies, a group known as OPEC+, which is due to meet on June 25 to decide whether to extend its record production cuts.
OPEC+ has been cutting output by 9.7 million barrels per day (bpd) since May to prop up prices, but the group is expected to extend the cuts by another month.
Oil prices have been volatile in recent weeks, with investors worried about the outlook for fuel demand as the coronavirus pandemic continues to spread.
The number of new cases in the United States has been rising in recent weeks, raising fears of a second wave of infections that could derail the economic recovery.
For now, however, oil prices remain supported by signs of a recovery in fuel demand.
“The market is still looking at the positive side of the equation,” said Stephen Innes, chief global markets strategist at AxiCorp. “The demand side of the equation is still looking good.”