Oil Holds Drop Near $62 With Virus Flare-Up Looming Over Market - Bloomberg

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Oil was steady in Asia with a Covid-19 flare-up in India and other nations dragging on the near-term demand outlook, even as OPEC+ projected a strong global recovery this year.

Futures in New York traded near $62 a barrel after slipping 0.4% on Monday. An OPEC+ technical committee raised its forecast for demand growth in 2021, but cautioned that a resurgent virus in India, Japan and Brazil could derail the oil demand recovery. The second Indian wave has been particularly deadly as it overwhelms the health-care system and cripples fuel consumption.

Indian Oil Corp., the country’s biggest refiner, is looking to offload gasoline into the spot market in a rare sale, while other processors are postponing planned maintenance at some plants as workers either flee or fall ill.

The deteriorating outlook in some countries may pose a challenge to OPEC+ when it meets for a monthly ministerial meeting on Wednesday to discuss its production policy, although the group has already agreed to start adding more supply to the market from May. OPEC Secretary-General Mohammad Barkindo said Monday that there are “positive signals” in the global economy, but also pointed to factors in the oil market that require ongoing vigilance.

Prices
West Texas Intermediate for June rose 4 cents to $61.95 a barrel on the New York Mercantile Exchange at 9:06 a.m. Singapore time. Brent for June settlement gained 6 cents to $65.71 on the ICE Futures Europe exchange after losing 0.7% in the previous session.

The prompt timespread for Brent was 59 cents a barrel in backwardation -- a bullish market structure were near-dated contracts are more expensive than later-dated ones. That compares with 40 cents at the start of April.

The OPEC+ committee of technical experts forecast that oil consumption will rebound by 6 million barrels a day this year from last, according to delegates who attended the panel on Monday. Most of the fuel inventories glut built up during the pandemic will have cleared by the end of this quarter, they said.

The recovery is being driven by a strong rebound in China and the U.S., while there are some positive signs emerging in parts of Europe. South Korea’s economy recovered at a stronger pace than expected last quarter, as investment picked up with export growth.

Other oil-market news:
Libya’s state-oil firm lifted force majeure on an eastern port after it was allocated about 1 billion dinars ($224 million) to resolve technical problems that have threatened a revival of the OPEC member’s energy industry. The Trans Mountain oil pipeline will halt some work along its expansion route after inspectors discovered nests of Anna’s hummingbirds in an area near Burnaby, B.C.

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Oil Holds Drop Near $62 With Virus Flare-Up Looming Over Market - Bloomberg
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