Oil Holds Near $60 as Uneven Recovery Holds Back Further Rally

© Reuters.

(Bloomberg) — Oil was steady near $60 a barrel in early Asian trading as investors assessed an uneven demand outlook amid rising Covid-19 cases in some regions and an impending increase in supply.

Futures in New York edged higher after climbing 0.6% Monday. Pockets of higher fuel consumption are emerging as vaccination rates increase, but the flare-up of cases is leading to renewed lockdowns and restrictions in some countries. Adding to the bearish outlook is the prospect for more supply from the U.S. next month, which will coincide with an uptick in output from OPEC+.

Oil remains stuck near $60 a barrel after a rally faltered in mid-March amid concerns over near-term demand following the resurgence of the virus. Despite the recovery wobbles, OPEC+ is betting on higher consumption in the coming months and will soon start adding more crude to the market.

Saudi Arabia, meanwhile, was once again the focus of an assault by Yemen’s Houthis, with the group targeting oil facilities with explosive-laden drones. The frequency of attacks has increased this year, but they have rarely claimed lives or caused extensive damage.

Brent’s prompt timespread was 42 cents a barrel in backwardation — a bullish market structure where near-dated contracts are more expensive than later-dated ones — on Monday. That compares with 40 cents at the start of April.

Oil production from the Permian Basin, the most prolific U.S. shale patch, is expected to expand to levels not seen since the start of the pandemic next month, according to data from the Energy Information Administration. Output is set to climb to about 4.47 million barrels a day in May.

Read More   Target turns to Unilever's Sundial for exclusive beauty label

©2021 Bloomberg L.P.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.


This website uses cookies. By continuing to use this site, you accept our use of cookies.