Bullish oil market File graphics
Brent crude for June rose 22 cents, or 0.3%, to $67.49 a barrel by 05:05 WAT while U.S. West Texas Intermediate crude for June was at $64.04 a barrel, up 18 cents, or 0.3%.
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A gauge of demand for U.S. petroleum products increased last week to the highest in more than two months, while distillate inventories -- a category that includes diesel -- dropped the most since early March. Fuel demand may get another boost as China breaks for an extended holiday on Saturday, with mobility expected to climb to a record.
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.
However, concerns about the pandemic are lingering, as India has been hit particularly hard by a second wave that’s pummeled fuel consumption and stretched the healthcare system beyond its limits. Rystad Energy cut its demand estimates for the nation and forecast a 1.4 million barrel-a-day surplus in global inventories next month due to the impact.
READ ALSO: OPEC+ Compliance With Oil Cuts In March Largely Due To Saudi Arabia – IEA
“The outbreak in India is holding back oil’s rally,” Howie Lee, an economist at Singapore’s OCBC bank said. “But if India can sort it out and hopefully avert a full lockdown in the process, the market should likely continue its rally.”
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 rose by 90,000 barrels last week, much smaller than analysts’ forecasts for a 659,000-barrel build.
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