Oil rises on drawdown in U.S. oil stocks, OPEC demand outlook

By Sonali Paul
MELBOURNE, April 14 (Reuters) - Oil prices rose in early
trade on Wednesday, adding to overnight gains, after industry
data showed U.S. oil inventories declined more than expected and
OPEC raised its outlook for oil demand.
Brent crude LCOc1 futures rose 28 cents, or 0.4%, to
$63.95 a barrel at 0057 GMT, after climbing 39 cents on Tuesday.
U.S. West Texas Intermediate (WTI) crude CLc1 futures
similarly climbed 28 cents, or 0.5%, to $60.46 a barrel, adding
to Tuesday's rise of 48 cents.
Oil price gains over the past week have been underpinned by
signs of a strong economic recovery in China and the United
States, but have been capped by concerns over stalled vaccine
rollouts worldwide and soaring COVID-19 infections in India and
Brazil.
Nevertheless, the Organization of the Petroleum Exporting
Countries (OPEC) tweaked up its forecast on Tuesday for world
oil demand growth this year, now expecting demand to rise by
5.95 million barrels per day (bpd) in 2021, up by 70,000 bpd
from its forecast last month. It is banking on the pandemic to
subside and travel curbs to be eased. "It was a welcome prognosis by the market, which had been
fretting about the impact the ongoing pandemic was having on
demand," ANZ Research analysts said in a note.
Further supporting the market on Wednesday, sources said
data from the American Petroleum Institute showed crude stocks
fell by 3.6 million barrels in the week ended April 9, compared
with estimates for a decline of about 2.9 million barrels from
analysts polled by Reuters. API/S Traders are waiting to see if official inventory data from
the U.S. Energy Information Administration (EIA) on Wednesday
matches that view.
Market gains are being capped on concerns about increased
oil production in the United States and rising supply from Iran
at a time when OPEC and its allies, together called OPEC+, are
set to bring on more supply from May.
"They may have to contend with rising U.S. supply," ANZ
analysts said.
EIA said this week oil output from seven major shale
formations is expected to rise by 13,000 bpd in May to 7.61
million bpd.