WTI crude oil prices have strengthened by almost 2% early on Wednesday, buoyed by the API report revealing a steep decline in US crude inventories. At the time of writing, WTI crude oil is trading at around $38.35 per barrel.

US oil continues to trade bullish since the previous session when it rose by over $1 per barrel, a strong turnaround after losing more than 10% of its value over the past week. Oil markets are under pressure owing to the recent spike in coronavirus cases around the world, which have prompted several governments to bring back lockdowns and restrictions that could further weaken the demand for crude oil.

However, on Tuesday, the decline in oil prices eased after the API report revealed an 8 million barrel drawdown in US crude stockpiles. This went against economists’ forecast for an increase by 890k barrels and supported oil prices.

Gains in crude oil due to the API report remain limited due to fresh lockdown announcements from Italy, Norway and Hungary. Meanwhile, OPEC member Algeria joined Saudi Arabia and Russia in supporting an extension to the deeper supply cuts beyond the end of this year, in the wake of the ongoing coronavirus crisis.