Oil pumps at an oil field. Picture: 123RF / PIXNOO
Oil pumps at an oil field. Picture: 123RF / PIXNOO

London — Oil prices fell on Wednesday, reversing the previous session’s surge as worries about a second wave of the coronavirus pandemic outweighed support from a gradual reopening of global economies.

Brent crude, which on Tuesday rose to its highest level since a price plunge began in March, slipped 47 US cents, or 1.1%, to $42.16 a barrel by 8.14am GMT.

The benchmark crude has climbed from below $16 in April but remains a third lower than its level at the end of 2019.

US West Texas Intermediate (WTI) crude fell 59c, or 1.5%, to $39.78 a barrel.

A rising number of coronavirus cases in the US, China, Latin America and India has unnerved investors.

"These are all important oil demand centres. A second wave of infections and lockdowns will derail the global economic recovery and with it, oil demand and prices," said Stephen Brennock of broker PVM.

Upbeat European manufacturing surveys offered some support, but European Central Bank chief economist Philip Lane said recent solid data was not necessarily a good guide and the eurozone economy would need a long time to recover.

Further pressure on prices came from a bigger-than-expected rise in US crude inventories, according to industry group the American Petroleum Institute (API).

However, US petrol and distillate inventories fell, suggesting consumption was picking up as lockdowns were eased.

US government data will be released on Wednesday.

Global oil demand has started to recover as economies emerge from lockdown, while Opec and allied producers, a grouping known as Opec+, have slashed output, and US shale producers have shut wells.

But global inventories are still bulging. India’s oil imports in May hit the lowest since October 2011 as refiners with brimming stores of crude cut purchases.

China, the world's top crude importer, is also expected to slow crude imports in the third quarter, after record purchases in recent months.