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Oil extended gains in early Asian trading after an industry report pointed to another decline in U.S. crude stockpiles that followed an upbeat assessment of the demand outlook from OPEC.
Futures in New York rose 0.6% in New York after advancing 0.8% on Tuesday. The American Petroleum Institute reported crude inventories dropped by 3.61 million barrels last week, according to people familiar, which will be a third weekly draw if confirmed by government data Wednesday. OPEC boosted its consumption forecast for this year and predicted the market recovery will continue in the coming months, despite fears about a virus flare-up.
Oil’s sizzling start to the year faltered in mid-March as some regions saw a resurgence in Covid-19 cases, raising concerns about near-term fuel demand. The Organization of Petroleum Exporting Countries said in its monthly report Tuesday that rising consumption should help to trim stockpiles even as OPEC+ readies to return more barrels to the market from May.
The coronavirus, however, is clouding the outlook for demand with some countries renewing restrictions and lockdowns to curb its spread. That’s been highlighted by normally bustling streets in India left deserted.
The prompt time spread for Brent was 39 cents a barrel in backwardation — where near-dated contracts are more expensive than later-dated ones — on Tuesday. That compares with 40 cents at the start of April.
