Oil mixed as coronavirus risks offset hopes that crude stockpiles will shrink

TOKYO, May 15 (Reuters) - Oil prices were mixed on Friday
after big gains a day earlier when the International Energy
Agency (IEA) predicted crude stockpiles would start to shrink in
second-half 2020 after surging while the coronavirus pandemic
slashed fuel demand.
Brent crude LCOc1 was up 1 cent at $31.13 a barrel by 0115
GMT, after rising nearly 7% on Thursday. The global benchmark is
roughly flat on the week after rising for the previous two
weeks.
Giving up earlier gains, West Texas Intermediate (WTI) oil
was down 13 cents, or 0.5%, at $27.43 a barrel, having jumped 9%
in the previous session. WTI is still heading for a third weekly
gain, up more than 10%.
Prices have been lifted by more signs that oil output is
falling among OPEC and other major producers, a grouping known
as OPEC+. But the market mood remains cautious, with the
coronavirus pandemic far from over and new clusters emerging in
countries where lockdowns have been eased.
There remains the "risk of renewed outbreaks of COVID-19 ...
and questionmarks over how far OPEC+ production cuts will be
implemented," ANZ said in a note.
Still, as demand increases with the easing of lockdowns to
get economies going again, the IEA said it expects crude
inventories to fall by about 5.5 million bpd in the second half
of this year. U.S. crude inventories fell for the first time in 15 weeks,
the Energy Information Administration said on Wednesday,
dropping by 745,000 barrels to 531.5 million barrels in the week
to May 8. Analysts had expected another increase. EIA/S
Output cuts will boost the trend towards lower inventories.
OPEC+ had already agreed to cut production by nearly 10
million bpd, a record amount, and Saudi Arabia extended its
planned reductions for June, pledging earlier this week to
slashing production by nearly 5 million barrels per day.
Saudi Aramco 2222.SE , the world's largest oil exporter,
reduced the volume of crude it will supply to at least three
buyers in Asia by as much as 30% for June, three sources with
knowledge of the matter told Reuters on Thursday.
OPEC+ now wants to extend overall production cuts beyond May
and June when the group next meets, sources told Reuters earlier
this week.