UPDATE 4-Oil rises above $31 as lockdown easings counter supply glut

* API says U.S. crude inventories rise; EIA report due
* German government, states agree on way to ease lockdown
* OPEC+ began record oil supply cut on May 1

(Updates prices, changes byline, adds quote)
By Shu Zhang and Sonali Paul
LONDON, May 6 (Reuters) - Oil rose above $31 a barrel on
Wednesday as hopes for a recovery in demand as some countries
ease coronavirus lockdowns offset a report showing a
higher-than-expected rise in U.S. inventories.
Brent crude has almost doubled since hitting a 21-year low
reached on April 22, supported by expectations demand will
recover and by a record supply cut led by the Organization of
the Petroleum Exporting Countries.
Brent LCOc1 was up 79 cents, or 2.6%, at $31.76 a barrel
at 0930 GMT, having risen in the past six sessions. West Texas
Intermediate (WTI) crude CLc1 added 88 cents, or 3.6%, to
$25.44.
"Clearly, the optimism of the re-opening of the global
economy has supported the oil rally," said Naeem Aslam, analyst
at Avatrade.
But in a reminder that a supply glut persists, the American
Petroleum Institute said on Tuesday that U.S. crude inventories
rose by 8.4 million barrels last week, more than analysts
expected. "We're talking about normalisation of supply and demand but
we've got a long way to go," said Lachlan Shaw, National
Australia Bank's head of commodity strategy.
Italy, Spain, Nigeria and India, as well as some U.S. states
began allowing some people to go back to work and opened up
construction sites, parks and libraries.
Germany's federal government and 16 states have agreed on
ways to ease the lockdown. The easing of lockdowns should lead to a recovery in global
oil demand, which in April was expected to collapse by at least
20%, an unprecedented drop, as governments told people to stay
at home.
To tackle the resulting glut, OPEC and its allies agreed to
a record oil output cut of 9.7 million barrels per day, about
10% of pre-coronavirus demand. That reduction began on May 1.
For now though, soaring inventories are a reminder of excess
supply lingering in the market.
Traders will be looking for confirmation of the API's
inventory report when the official U.S. government figures from
the Energy Information Administration come out later on
Wednesday. EIA/S
"We would tend to agree that the market has bottomed out,
but would caution against getting overly excited about this,"
said analysts at JBC Energy. "The data trundling in for April
really is shockingly bad."