Oil edged up to around $42 a barrel today after a report said US fuel inventories fell, although rising crude supply and growing numbers of coronavirus cases that raise concern of stalling demand capped gains. 

The American Petroleum Institute, an industry group, said stocks of gasoline and distillate fuel dropped, while crude inventories rose.

Official inventory numbers from the Energy Information Administration are due later today. 

Brent crude was up 23 cents, or 0.6%, to $41.95 today, reversing an earlier drop. 

US West Texas Intermediate crude was up 16 cents, or 0.4%, at $39.96. Both contracts fell more than 4% on Monday, though they rose yesterday. 

Analysts said that oil prices are still faring comparatively well today given all the headwinds they are facing - a firm US dollar, concerns about demand and rising supply. 

Surging infections in countries including India, France and Spain and new restrictions in Britain have renewed worries about demand, just as more supply may come from Libya.

In the US, the Covid-19 death toll has passed 200,000. 

Oil prices collapsed as the pandemic decimated demand, with Brent falling below $16, a 21-year low, in April. 

A record output cut by the Organisation of the Petroleum Exporting Countries and allies, known as OPEC+, has helped revive prices. 

OPEC faces a new challenge in that Libya, an OPEC member exempt from the supply cut, is aiming to boost supply after an easing of the country's conflict. But previous recoveries have not lasted. 

"The road to recovery will be long and bumpy," said Stephen Brennock of broker PVM.