Oil prices slip as pandemic takes toll on India’s fuel sales

SINGAPORE: Oil prices fell on Monday as a catastrophic second wave of a coronavirus epidemic in India reduce quick a restoration in oil demand there, offsetting optimism a few robust rebound in demand in developed nations and China within the second half of the 12 months.

Brent crude futures for July fell 15 cents, or 0.2 per cent, to $66.61 a barrel by 0244 GMT whereas U.S. West Texas Intermediate for June was at $63.48 a barrel, down 10 cents, or 0.2 per cent.

State-level restrictions aimed toward stemming infections in India have brought on fuel sales on the earth’s third largest client to drop in April, preliminary knowledge exhibits.

“Overall fuel demand is down by about 7 per cent from pre-COVID level of April 2019,” A.Ok. Singh, head of promoting at refiner Bharat Petroleum Corp stated, including that India’s demand was near pre-COVID ranges in March.

Analysts predict India’s demand for transportation fuels to witness a sharper droop in May attributable to extra restrictions.

“Given that it still appears as though Covid-19 in India has not peaked, we expect to see further downside to fuel demand over May,” ING analysts stated in a be aware.

On Sunday, a number one Indian business physique urged authorities to curtail financial exercise, as healthcare system has been overwhelmed by the spiralling infections.

Globally, nonetheless, the roll out of vaccination campaigns is anticipated to carry oil demand, particularly throughout peak journey season within the third quarter, prompting analysts to extend their forecasts for Brent prices for a fifth straight month, a Reuters ballot confirmed.

The survey of 49 contributors forecast that Brent would common $64.17 a barrel in 2021, up from final month’s consensus of $63.12 and the $62.30 common for the benchmark to date this 12 months.

On the provision facet, the Organization of the Petroleum Exporting Countries pumped 25.17 million bpd in April, up 100,000 barrels from March, as Iran and different producers elevated output. OPEC‘s manufacturing has risen each month since June 2020 aside from February.

Iran and the United States are in talks to revive a nuclear deal which might result in a lifting of U.S. sanctions that will enable Iran to ramp up oil exports.

Washington on Sunday denied a report by Iran’s state tv that the arch-foes had reached a prisoner swap deal in trade for the discharge of $7 billion of Iranian oil earnings frozen by U.S. sanctions in different nations.

In the United States, vitality companies added oil and pure gasoline rigs final week, resulting in a ninth straight month-to-month rig depend enhance, as a restoration in prices lured some drillers again to the wellpad, in line with Baker Hughes.

However, U.S. crude oil manufacturing dropped by over 1,000,000 barrels per day in February, to the bottom ranges since October, 2017, in line with a month-to-month authorities report on Friday.

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