* API report shows surprise drop in U.S. crude inventories
* No policy shift expected by U.S. Federal Reserve
* IEA says demand won't reach pre-pandemic level until 2023
* Coming up: EIA report, 1430 GMT
(Updates prices, adds French COVID-19 measures, WHO on vaccine)
By Alex Lawler
LONDON, March 17 (Reuters) - Oil slipped for a fourth day on
Wednesday as concerns about weaker demand in Europe outweighed
an industry report that showed U.S. crude inventories fell
unexpectedly last week.
Several European countries have paused the use of
AstraZeneca's COVID-19 vaccine on worries over possible side
effects. Germany is seeing rising coronavirus cases, Italy is
imposing a nationwide Easter lockdown and France plans to impose
tougher curbs.
Brent crude was down 38 cents, or 0.6%, at $68.01 a
barrel by 1410 GMT, having pared earlier losses. U.S. West Texas
Intermediate (WTI) crude dropped 35 cents, or 0.5%, to
$64.45.
"The suspension will not do the bloc's economic and fuel
recovery any favours," said Stephen Brennock of oil broker PVM.
"The hope now is that Europe can get its sluggish vaccine
rollout back on track."
A World Health Organization (WHO) vaccine safety panel on
Wednesday said the benefits of the AstraZeneca vaccine
outweigh its risks and recommends that vaccinations continue.
Oil prices were also pressured by the latest reports from
the International Energy Agency, which said a supercycle is
unlikely and demand is not expected to return to pre-pandemic
levels until 2023.
"IEA's report has triggered action among oil traders," said
Naeem Aslam of Avatrade. "We have seen some selling."
Still, oil has recovered from historic lows reached last
year as demand collapsed, buoyed by record oil output cuts by
the Organization of the Petroleum Exporting Countries (OPEC) and
its allies. Brent reached $71.38 on March 8, its highest since
Jan. 8, 2020.
The market gained support, however, from American Petroleum
Institute data, which trading sources said Ushowed U.S. crude
inventories fell by 1 million barrels last week. Analysts had
expected a rise.
Traders will be looking to the official U.S. Energy
Information Administration report at 1430 GMT for confirmation
of the API figures.
Investors are also looking to the results of the U.S.
central bank's Federal Open Market Committee meeting. No policy
shift is expected.
A rising dollar ahead of the Fed's announcement was also a
headwind for oil because a stronger dollar makes crude more
expensive for holders of other currencies.
(Additional reporting by Roslan Khasawneh in Singapore and
Sonali Paul in Melbourne; Editing by Jacqueline Wong and David
Goodman)
Astrazeneca (AZN)
