Oil falls as demand growth concerns outweigh U.S. stock drawdown

* U.S. oil stocks fall across the board – EIA

* Fuel demand in U.S. still remains subdued

* Second wave of coronavirus in Europe threatens economic
recovery
(Adds comment, updates prices)

MELBOURNE/SINGAPORE, Sept 24 (Reuters) – Oil prices dropped
on Thursday, weighed down by concerns that U.S. economic
recovery is slowing as the coronavirus outbreak lingers, while a
renewed wave of COVID-19 cases in Europe have led to reimposed
travel restrictions in several countries.

The jitters over demand and economic outlook due to the
coronavirus resurgence have prompted a rally in the dollar as
investors turned to safer assets, adding pressure to oil prices.
A stronger dollar makes oil, priced in U.S. dollars, less
attractive to global buyers.

U.S. West Texas Intermediate (WTI) crude futures fell
60 cents, or 1.5%, to $39.33 a barrel at 0445 GMT, while Brent
crude futures dropped 47 cents, or 1.1%, to $41.30 a
barrel.

Both benchmarks climbed slightly on Wednesday after
government data showed U.S. crude and fuel stockpiles dropped
last week. Gasoline inventories fell more than expected, sliding
by 4 million barrels, and distillate stockpiles posted a
surprise drawdown of 3.4 million barrels.

Still, fuel demand in the U.S. remains subdued as the
pandemic limits travel. The four-week average of gasoline demand
was 8.5 million barrels per day (bpd) last week, the government
data showed, down 9% from a year earlier.

Prices turned down after data showed U.S. business activity
slowed in September, U.S. Federal Reserve officials flagged
concerns about a stalling recovery, and Britain and Germany
imposed restrictions to stem new coronavirus infections — all
factors affecting the fuel demand outlook.

“Oil prices are wilting as product for immediate delivery
remains plentiful,” said Jeffrey Halley, a senior market analyst
at OANDA.

“Consumption outlook concerns are rising as COVID-19
restrictions return in Europe, and the clamor from the Federal
Reserve for more U.S. fiscal stimulus, undermines the global
recovery case, the lynchpin for oil’s price recovery.”

On the supply side, the market remains wary of a resumption
of exports from Libya, although it is unclear how quickly it can
ramp up volumes. Libya’s National Oil Corp (NOC) seeks to boost
output to 260,000 bpd by next week.

“That clearly is going to be something the oil market
doesn’t need right now,” said Commonwealth Bank commodities
analyst Vivek Dhar.

(Reporting by Sonali Paul and Koustav Samanta; Editing by
Christian Schmollinger and Michael Perry)

Stockmarkets and cryptocurrency quotes, Stockmarkets Insights