Oil prices extend gains as demand outlook offsets India concerns

By Florence Tan
SINGAPORE, April 29 (Reuters) - Oil prices extended gains on
Thursday after rising 1% the previous session, as bullish
forecasts on recovering demand this summer offset concerns of
rising COVID-19 cases in India, Japan and Brazil.
Brent crude LCOc1 for June edged up 8 cents, or 0.1%, to
$67.35 a barrel by 0104 GMT while U.S. West Texas Intermediate
crude CLc1 for June was at $63.98 a barrel, up 12 cents, or
0.2%.
OPEC, Russia and their allies, a group known as OPEC+, stuck
to their plans for a gradual easing of oil production
restrictions from May to July, after OPEC raised slightly its
demand growth for 2021 to 6 million barrels per day. The group
also expects global stocks to reach 2.95 billion barrels in
July, taking them below the 2015-2019 average. "A closer look at the state of global oil inventories
suggests that the market may be closer to the point of
rebalancing than what OPEC+ may think," Citi analysts said,
adding that most of the crude inventory overhang has been
absorbed by the market although refined products inventories
still need to be worked off.
The bank also expects vaccination campaigns in North America
and Europe to boost oil demand to a record high of 101.5 million
bpd this summer although rising COVID-19 cases in India and
Brazil could hit local demand if deeper lockdowns are
re-imposed. Investors focused on a ramp-up in U.S. refinery operating
rates and drawdown in distillates stocks last week, in data
released by the Energy Information Administration on Wednesday.
U.S. crude inventories USOILC=ECI rose by 90,000 barrels
last week, much smaller than analysts' forecasts for a
659,000-barrel build.
In the UK, loadings of the Brent crude oil stream in the
British North Sea, which underpin the Brent futures contract,
would stop in mid-May if no deal is reached between the Unite
union and the Shetland Islands Council employing them.