UPDATE 6-Oil rises on U.S. and European demand growth optimism

* Demand boost in U.S. and Europe bolsters sentiment
* Strong U.S. economic outlook and weaker dollar also
support
* India's soaring COVID-19 infections limit demand outlook

(Updates prices)
By Julia Payne
LONDON, May 4 (Reuters) - Oil prices rose on Tuesday after
more U.S. states eased lockdowns and the European Union sought
to attract travellers, though soaring COVID-19 cases in India
capped gains.
Brent crude LCOc1 futures were up $1.19, or 1.76%, at
$68.75 a barrel by 1341 GMT after climbing by 1.2% on Monday.
U.S. West Texas Intermediate (WTI) crude CLc1 futures rose
by $1.05, or 1.63%, to $65.54 after a 1.4% jump on Monday. Both
contracts were up about 2% in earlier trade.
Prices are being supported by the prospect of a pick-up in
fuel demand as New York state, New Jersey and Connecticut look
to ease pandemic curbs and the EU plans to open up to foreign
visitors who have been vaccinated, analysts said.
"The current strength is led by U.S. gasoline, where demand
is seen as healthy as more motorists take to the roads," said
PVM Oil Associates analyst Tamas Varga.
"Yesterday's stock market strength is being followed through
this morning in the oil market ... the market focuses on the
successful rollout of vaccine programmes in the U.S. and in
other developed countries and not on the devastation in India
and Brazil."
For further signs of rising U.S. oil demand, traders will be
watching for reports on crude and product stockpiles from the
American Petroleum Institute on Tuesday and the U.S. Energy
Information Administration on Wednesday.
Five analysts polled by Reuters estimated on average that
U.S. crude inventories USOILC=ECI fell by 2.2 million barrels
in the week to April 30. Oil inventories rose in the previous
two weeks. The rate of refinery utilisation USOIRU=ECI was expected
to have increased by 0.5 percentage points last week, from 85.4%
of total capacity in the week ended April 23, the poll showed.
A weaker dollar, hit by an unexpected slowdown in U.S.
manufacturing growth, also helped to shore up oil prices on
Tuesday. The lower dollar makes oil more attractive to buyers
holding other currencies. In India, the total number of infections rose to just short
of 20 million after the country registered more than 300,000 new
cases for a 12th straight day, which is expected to hit fuel
demand in the world's most populous country behind China.
"Strong demand forecasts for the second part of 2021 are
providing a bullish seat for traders to drive rallies, not
allowing any strong negative price reaction to drag for long,
even at times of crisis, such as the recent one in India," said
Rystad Energy analyst Louise Dickson.
"In fact, looking at balances going forward, prices will
likely climb again to about $70 per barrel in the coming months,
unless we see another policy change by OPEC+."