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Oil rises, but gains capped by demand concerns as India reels from COVID-19

Published 04/27/2021, 10:10 AM
Updated 04/27/2021, 10:20 AM
© Reuters.
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TOKYO, April 27 (Reuters) - Oil prices bounced back early on
Tuesday from drops in the previous session, but gains were seen
likely capped by growing concern about fuel demand in India, the
world's third-biggest crude importer now slammed by spiralling
new coronavirus cases.
Brent crude LCOc1 was up 26 cents, or 0.4%, at $65.91 a
barrel by 0141 GMT, after dropping 0.7% on Monday. U.S. oil
CLc1 gained 23 cents, or 0.4%, to $62.14, having declined by
the same amount the previous session.
"There are clearly some concerns around the demand outlook,
particularly over how the Covid-19 situation is developing in
India," ING Economics analysts said in a note.
The Indian government ordered the country's military to help
respond to the surging coronavirus infections, with countries
including Britain, Germany and the United States promising aid
as the emergency overwhelms hospitals. India's woes comes as the Organization of the Petroleum
Exporting Countries (OPEC) and allies led by Russia, a group
known as OPEC+, are set to discuss policy on production at a
meeting this week.
The OPEC+ joint technical committee has maintained a
forecast for growth in oil demand growth this year, but has
concerns about the surging COVID-19 cases in India and
elsewhere, three sources from the producer group told Reuters.
"The big question is whether OPEC+ feels that the situation
is bad enough to alter its planned production easing from 1
May," said ING. "We still expect that the group will announce no
changes to its plan when they meet tomorrow."


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