Oil rebounds to $66 ahead of OPEC+ meeting, India’s Covid surge weighs

LONDON: Oil rebounded to $66 a barrel on Tuesday on speculation that a meeting of producer group OPEC+ may tweak oil output policy to address India’s coronavirus crisis that could dent fuel demand.

OPEC and allies will hold a monitoring meeting on Tuesday instead of April 28 as planned earlier. A technical meeting on Monday had voiced concern about surging Covid-19 cases, although it kept its 2021 oil demand forecast unchanged.

Brent crude was up 58 cents, or 0.9 percent, at $66.23 a barrel by 0820 GMT, after dropping 0.7 percent on Monday. US oil gained 79 cents, or 1.3 percent, to $62.70.
“Oil prices are ticking up today on trader hopes that OPEC+ may address India’s demand destruction with supply policy amendments in its coming meeting,” said Bjornar Tonhaugen of Rystad Energy.

The group known as OPEC+ is set to slightly ease oil output cuts from May 1, as demand further recovers from the coronavirus crisis. The easing plan was agreed before the surge in Indian cases.

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India, the world’s third-largest crude importer, over the past 24 hours recorded 323,144 new cases, slightly below a worldwide peak of 352,991 reached on Monday. The number of deaths neared 200,000.

Others expect OPEC+ to stick to its easing policy.

“We still expect that the group will announce no changes to its plan,” ING Economics analysts said in a note.

Record OPEC+ supply cuts put in place last year have helped drive a recovery in oil prices from historic lows. About a year ago, US crude traded in negative territory due to a massive supply glut.

Also in focus this week will be the latest US oil inventory reports, which analysts expect will show a rise in crude stocks. The first report, from the American Petroleum Institute, is out at 2030 GMT.

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