Brent crude LCOc1 was up $0.59, or 1.4%, to $41.86 a barrel at 1107 GMT and USA crude was up 64 cents, or 1.6%, at $39.91 a barrel. "Both contracts are coming under stronger pressure this morning as the spectre of lockdowns returns", said JBC Energy.
New COVID-19 cases in the United States rose by almost 50,000 on Wednesday, according to a Reuters tally, the biggest one-day spike since the start of the pandemic.
Crude oil futures for July delivery eased Rs 1, or 0.03 percent, to Rs 3,002 per barrel at 15:19 hours IST on a business turnover of 3,936 lots.
California, meanwhile, rolled back efforts to reopen its economy, banning indoor restaurant dining in much of the state, closing bars and beefing up enforcement of social distancing and other measures.
"But worrisome for oil prices are the densely populated southern U.S. states that have been ravaged by the virus and are among the US's most weighty consumers of gasoline". Texas ordered residents to wear masks as the state reported its second-most daily infections of the outbreak.
USA crude and gasoline stocks fell more than expected last week, while distillate inventories rose, data released by the American Petroleum Institute (API) late on Tuesday showed.
"From a trader's perspective, there is always a concern when the data is too good; especially beneath the fog of the current Covid-19 headlines that suggest de-risking playbooks remain in play ahead of the United States long weekend said Stephen Innes, Chief Global Market Strategist at AxiCorp".
USA non-farm payrolls increased by 4.8 million in June, the Labor Department reported, beating expectations, even as permanent job losses rose.
"However, rising cases of COVID-19 in some USA states could keep oil prices in check and will most definitely temporary overly zealous bullish ambitions".
"The EIA data showed that gasoline imports hit the highest level since last August and peaked the most on a seasonal basis in nine years".
A litre of fuel is now selling between N140.8 and N143.8 at retail stations across the country, up from the previous N121.50 and N123.50 band.