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Oil prices Gain as Demand Outlook Grows Despite Rising COVID-19 Cases.

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 for June edged up 8 cents, or 0.1%, to $67.35 a barrel by 0104 GMT.

U.S. West Texas Intermediate crude for June was at $63.98 a barrel, up 12 cents, or 0.2%.

oil prices
U.S WTI Oil Index Performance Chart

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 its demand growth slightly 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.

On the demand side, investors are looking for a record high of oil demand in the summer as COVID-19 vaccination rates in North America and Europe accelerate. However, the continuously rising COVID-19 cases in India and Brazil could lead to tighter lockdowns and hit the demand recovery.

“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. Most of the crude inventory overhang has been absorbed by the market although refined products inventories still need to be worked off. ” Citi analysts

Investors have shifted their focus On; the U.S. crude oil supply data from the U.S. Energy Information Administration reported on Wednesday that they had recorded a build of 90,000 barrels for the week to April. 23. Forecasts had predicted a 659,000-barrel build, while a 594,000-barrel build was recorded during the previous week.

Additionally, In Asia, fuel demand is expected to increase in China ahead of a five-day holiday starting Saturday.

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.