New restrictions to block the spread of the virus are expected to reduce transport fuel demand in May.
Oil prices have fallen again as a catastrophic second wave of coronavirus outbreaks in India slowed the recovery in oil demand there, offsetting optimism about a sharp rise in demand in developed countries and China in the second half of the year.
Brent crude futures in July fell 15 cents, or 0.2 percent, to $ 66.61 a barrel at 2:44 GMT Monday, while the United States in West Texas they reached $ 63.48 a barrel, down 10 cents or 0.2 percent.
State-level restrictions aimed at preventing infections in India have led to a drop in fuel sales to the world’s third-largest oil consumer in April, preliminary data show.
“Global fuel demand has fallen by about 7 percent from the pre-COVID level of April 2019,” said AK Singh, head of marketing at Bharat Petroleum Corp., which added that demand for the India was close to pre-COVID-19 levels in March.
Analysts expect India’s transport fuel demand to witness a sharper fall in May due to new restrictions.
“Given that it still appears that COVID-19 in India has not peaked, we expect to see a further disadvantage in fuel demand during the month of May,” ING analysts said in a note.
Sunday, leading body of Indian industry instat authorities to reduce economic activity, as the country’s health system has been overwhelmed by spiraling infections.
With more than 300,000 daily cases reported for nearly two weeks, India is battling a fierce battle second wave of the coronavirus that has overflowed its fragile and underfunded healthcare system.
Hospitals have been filled, medical oxygen supplies have been depleted and morgues and crematoria have been flooded.
With 368,147 new cases in the last 24 hours, coronavirus infections in India now stand at 19.93 million, while their fatalities are 218,959, according to data from the health ministry.
However, globally, the deployment of vaccination campaigns is expected to raise demand for oil, especially during the high-season travel season in the third quarter, prompting analysts to raise their price forecasts. of Brent for the fifth month in a row, according to a Reuters poll.
The survey of 49 participants predicted that Brent would reach an average of $ 64.17 a barrel in 2021, compared to last month’s consensus of $ 63.12 and an average of $ 62.30 from the benchmark of what went on. ‘year.
In terms of supply, the Organization of the Petroleum Exporting Countries (OPEC) pumped 25.17 million barrels per day in April, an increase of 100,000 barrels compared to March, as Iran and other producers they increased production. OPEC production has increased every month since June 2020, with the exception of February.
Iran and the US are in talks to reactivate a nuclear deal that could lead to the lifting of US sanctions that would allow Iran to increase oil exports.
Washington on Sunday denied a report by Iranian state television that enemies had reached a prisoner-swap agreement in exchange for the release of $ 7 billion of Iranian oil frozen by U.S. sanctions on other countries.
In the U.S., energy companies added oil and natural gas platforms last week, a ninth consecutive monthly increase in platforms as the price recovery drew some drills into the hole, according to Baker Hughes.
However, U.S. crude oil production fell more than a million barrels a day in February, to its lowest levels since October 2017, according to a monthly government report on Friday.