Oil climbs as demand optimism overshadows India worries

* Brent to average at $64.17/bbl in 2021 - Reuters poll
* U.S. denies prisoner swap deal with Iran

By Florence Tan
SINGAPORE, May 3 (Reuters) - Oil prices climbed on Monday as
optimism about a strong rebound in fuel demand in developed
countries and China in the second half of the year overshadowed
growing concerns of a full lockdown in India to curb the
COVID-19 pandemic.
Brent crude futures LCOc1 for July gained 36 cents, or
0.5%, to $67.12 a barrel by 0045 GMT while U.S. West Texas
Intermediate CLc1 for June was at $63.94 a barrel, up 36
cents, or 0.6%.
Vaccinations are expected to lift global oil demand,
especially during peak travel season in the third quarter,
prompting analysts to increase their forecasts for Brent prices
for a fifth straight month, a Reuters poll showed. The survey of 49 participants forecast that Brent would
average $64.17 a barrel in 2021, up from last month's consensus
of $63.12 and the $62.30 average for the benchmark so far this
year.
"Strong demand in regions such as North America, Europe and
China has brightened the overall outlook," ANZ analysts said in
a note.
This was despite a call by a leading Indian industry body
urging authorities to curtail economic activity to save lives on
Sunday as the country battles surging coronavirus cases that
have overwhelmed the healthcare system. On supplies, the Organization of the Petroleum Exporting
Countries pumped 25.17 million bpd in April, up 100,000 barrels
from March, to as Iran and other producers increased output.
OPEC's production has risen every month since June 2020 with the
exception of February. Iran and the United States are in talks to revive a nuclear
deal which could lead to a lifting of U.S. sanctions that would
allow Iran to ramp up oil exports.
Washington on Sunday denied a report by Iran's state
television that the arch-foes had reached a prisoner swap deal
in exchange for the release of $7 billion frozen Iranian oil
funds under U.S. sanctions in other countries. In the United States, energy firms added oil and natural gas
rigs last week, leading to a ninth straight monthly rig count
increase, as a recovery in prices lured some drillers back to
the wellpad, according to Baker Hughes. However, U.S. crude oil production dropped by over a million
barrels per day in February, to the lowest levels since October,
2017, according to a monthly government report on Friday.