Bloomberg
(Bloomberg) -- Oil dropped for a third day after data showed a rise in U.S. stockpiles and investors fretted over an uneven recovery in global demand.West Texas Intermediate shed 0.5% following a fall on Wednesday, when government figures showed the first rise in American stockpiles in a month. A flare-up in coronavirus cases in India, the third-largest oil importer, is hurting consumption, with curbs reimposed in cities including Mumbai. That’s offsetting positive signals on demand from other economies including China and the U.S.Crude’s run of losses is threatening to push prices back toward $60 a barrel, eroding gains last week that were underpinned by positive forecasts for worldwide energy demand from the International Energy Agency and Organization of Petroleum Exporting Countries. U.S. futures are still up by more than 25% this year, however, while global benchmark Brent remains backwardated, a bullish pattern that suggests an underlying resilience.“Asia, especially India, is becoming the epicenter of all fears surrounding demand,” said Steve Innes, chief market strategist at Axi. Still, “macros are pretty strong globally,” he added, flagging prospects for improved consumption over the northern hemisphere summer, aided by U.S. driving season.The U.S. figures showed a surprise addition of 594,000 barrels to nationwide stockpiles. However, the rolling four-week average for oil products supplied ticked higher, and the same snapshot for gasoline rose to 8.93 million barrels a day, about half a million barrels shy of the same week in 2019.The global picture -- and prospects for near-term energy demand -- are mixed. While vaccination drives are prompting greater activity and rising mobility in the U.S. and parts of Europe, the pandemic is tightening its grip elsewhere. More people were diagnosed with Covid-19 last week than in any other since the outbreak began, led by the rocketing numbers in India.See also: Global Virus Resurgence Threatens Vigorous Growth MomentumHighlighting the grim situation in South Asia, India on Wednesday reported a record 2,023 Covid-19 deaths, and an unprecedented 295,041 fresh cases. The dramatic surge has forced the nation’s financial and political capitals -- Mumbai and New Delhi -- to impose restrictions on movement.Even as India is facing a crisis, however, other countries are mapping out plans to open up in a potential boost to oil demand. Among them, France will lift curbs on regional movement and reopen schools in coming weeks, and Greece will ease most lockdown measures in May ahead of its reopening to tourism.Banking on a pick-up in demand, the OPEC+ alliance is planning to relax its deep supply curbs from May through to July. Despite these extra barrels, there is still expected to be a drawdown in global inventories, supporting prices, Australia & New Zealand Banking Group said in a report.Brent’s prompt timespread was 65 cents a barrel in backwardation, up from 40 cents at the start of April. That’s a bullish pattern, with near-term prices trading above those further out.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.
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