* U.S. crude stocks post biggest weekly drop since Dec
* U.S. gasoline, distillate inventories post surprise builds
* Surging COVID-19 cases dent fuel demand outlook
(Updates prices)
By Ahmad Ghaddar
LONDON, July 30 (Reuters) - Oil prices fell on Thursday, as
surging coronavirus infections around the world threatened to
jeopardise a recovery in fuel demand just as major oil producers
are set to raise output.
The most-active Brent crude contract for October
fell 58 cents, or 1.3%, to $43.51 a barrel at 1224 GMT. The
September Brent contract, which is expiring on Friday,
fell 57 cents to $43.18 a barrel.
U.S. West Texas Intermediate (WTI) crude futures were
down 70 cents, or 1.7%, at $40.57 a barrel.
Both benchmark contracts rose on Wednesday after the U.S.
Energy Information Administration (EIA) reported the largest
one-week fall in crude stocks since December.
"The recent resurgence of the coronavirus is an ominous sign
that the upside is limited in the immediate future," Tamas Varga
of oil brokerage PVM said.
Deaths from COVID-19 have now topped 150,000 in the United
States, while Brazil, with the world's second-worst outbreak,
set daily records of confirmed cases and deaths. New infections
in Australia hit a record on Thursday.
The potential hit to the demand rebound comes just as the
Organization of the Petroleum Exporting Countries (OPEC) and its
allies, together known as OPEC+, are set to step up output in
August, adding about 1.5 million barrels per day to global
supply.
"The easing OPEC+ supply restrictions combined with the
return of some U.S. production may test the resilience of market
sentiment in the coming weeks," Stephen Innes, chief global
market strategist at AxiCorp said.
Total and Royal Dutch Shell reported
small profits in the second quarter as their oil trading
businesses shielded them from the full force of the
pandemic-induced demand loss.
(Additional reporting by Sonali Paul in Melbourne and Koustav
Samanta in Singapore. Editing by Jane Merrimana and Edmund
Blair)
