* Benchmarks fall about 4% in March, gain around 22% in Q1
* OPEC+ panel lowers oil demand growth forecast
* Macron orders COVID-19 lockdown in France, closes schools
* U.S. crude inventories fall as refineries ramp up -EIA
* U.S. crude output in January remains 13% lower yr/yr - EIA
(New throughout; updates prices, market activity and comments
to settlement)
By Laila Kearney
NEW YORK, March 31 (Reuters) - Oil prices fell about 2% on
Wednesday as fresh lockdowns in Europe stoked fuel consumption
fears and a pessimistic demand outlook from OPEC and its allies
ahead of their meeting to decide on production curbs.
Brent crude LCOc1 for May, which expired on Wednesday,
settled at $63.54 a barrel, down 60 cents, or 0.9%. The more
active contract for June LCOc2 ended $1.43, or 2.2%, lower at
$62.74.
U.S. West Texas Intermediate (WTI) crude CLc1 futures
closed at $59.16 a barrel, losing $1.39, or 2.3%.
Brent was down 3.9% for the month and up 22.6% for the three
months ended March 31. WTI fell 3.8% in March and rose 21.9% for
the quarter.
Prices rose in the quarter mainly due to demand-recovery
optimism after COVID-19 vaccines began to roll out in the new
year. However, those hopes were dampened this month amid a
resurgence in cases that threaten to overwhelm hospitals in
European countries and curtail demand for fuel.
Oil prices on Wednesday extended their losses after
President Emmanuel Macron ordered France into its third national
lockdown and said schools would close for three weeks as he
sought to push back a third wave of COVID-19 infections.
"That was about the time the market tanked," said Bob
Yawger, director of energy futures at Mizuho Securities. "They
cannot get their act together with controlling the virus or
getting some kind of vaccine program together."
A downward revision of OPEC+ oil demand growth forecast for
this year by 300,000 barrels per day (bpd) also weighed on
prices. The Organization of the Petroleum Exporting Countries
and allies, together called OPEC+, are set to meet on Thursday,
to decide on output policy.
"Given this pessimistic outlook, it seems likely that the
production quotas will be left in place for another month," said
Commerzbank analyst Eugen Weinberg.
On Wednesday, the Joint Technical Committee, which advises
the group of oil-producing nations that includes Saudi Arabia
and Russia made no formal recommendation, three OPEC+ sources
said. Options, which the ministers are set to consider on
Thursday, include an output roll-over and a gradual increase,
two OPEC+ sources said.
OPEC+ are currently curbing output by just over 7 million
bpd in a bid to support prices and reduce oversupply. Saudi
Arabia has added to those cuts with an additional 1 million bpd.
"The oil market is still playing a guessing game today as to
what supply policy OPEC+ will set out at tomorrow's meeting, but
the $64 per barrel Brent price signals that traders expect a
cautious approach from the alliance," said Rystad Energy's
analyst Louise Dickson.
Kuwait's Oil Minister Mohammad Abdulatif al-Fares expressed
"cautious optimism" on Wednesday that global oil demand will
improve as COVID-19 vaccination programmes gather pace and
industrial output recovers. Limiting the price fall, U.S. crude stocks fell unexpectedly
last week as refinery runs increased, shrinking by 876,000
barrels in the last week, compared with analysts' expectations
for an increase of 107,000 barrels, the Energy Information
Administration said. EIA/S
Also, crude output in the United States, the world's top
producer, slipped to 11.1 million bpd in January, according to
the latest monthly data, and remained 13.1% lower than year-ago
levels. EIA/PSM
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