(Bloomberg) -- Oil steadied near $60 a barrel after a three-day fall with the OPEC+ alliance said to be poised to agree an output increase at its meeting this week, a sign of the market’s resilience as the impact of the pandemic ebbs.West Texas Intermediate was just 0.3% lower, while Brent was steady. The widespread view among the producer group is that the market can absorb additional barrels, according to people familiar with the matter.Oil has staged a powerful rally this year following significant OPEC+ supply curbs, including unilateral reductions by Saudi Arabia, and the vaccine-aided rebound in activity. That strengh has paved the way for the alliance to return some barrels, with OPEC Secretary-General Mohammad Barkindo saying on Tuesday that both the global economic outlook and oil market continue to show signs of improvement. The producer grouping could return the bulk of the 1.5 million barrel-a-day output hike that’s up for debate this week.“Tomorrow is an important day but it’s very much unclear how much OPEC will add to the supplies,” said Howie Lee, an economist at Oversea-Chinese Banking Corp. “I don’t think the Saudi’s will return their additional cuts fully.”There are two distinct elements to the production increase that the Organization of Petroleum Exporting Countries and it allies will address. First, will the cartel proceed with a 500,000 barrel-a-day collective hike in April? Second, how will Saudi Arabia phase out its extra reduction of 1 million barrels a day it’s been making voluntarily in February and March?See also: Big Oil Isn’t Betting on the Future of Crude: David FicklingOil bulls may draw comfort from further signs the pandemic is ebbing. The daily case count in the U.S. fell to on Monday to its lowest in more than four months, while economic indicators continued to improve. President Joe Biden said he hopes the country would be back to normal “by this time next year.”There are also signs of strength in Asia. Indian demand for gasoline, diesel and other fuels will reach a record in the 12 months through March 2022, according to estimates by the Petroleum Planning and Analysis Cell of the nation’s oil ministry. That’s almost a 10% rebound from the current virus-hit year.U.S. crude inventories rose more than 7 million barrels last week, the American Petroleum Institute reported, according to people familiar. If confirmed by the official government tally, that would be the largest weekly build since December. Still, the API figures also showed drops in gasoline and distillates.Shifts in Brent’s prompt timespread point to an easing of near-term tightness. It was at 52 cents a barrel in backwardation on Wednesday, the lowest reading since Feb. 11.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.
(Bloomberg) -- India, once the center of global oil demand growth, expects its fuel consumption to bounce back during the coming year as the nation recoups the losses caused by Covid-19.Demand for gasoline, diesel and other fuels will reach a record 215.24 million tons in the 12 months through March 2022, according to estimates by the Petroleum Planning and Analysis Cell of India’s oil ministry. That’s almost a 10% rebound from the current year, which has been hit hard by the virus.At one stage last year, India’s fuel consumption plunged by as much as 70%, led by the world’s biggest lockdown. The measures forced a sharp reduction in crude processing and imports, and helped drive a slump in international oil prices. On Thursday, the Organization of Petroleum Exporting Countries and allied nations will discuss how much crude to pump, and India is urging them to open the taps.The world’s No. 3 oil importer and consumer expects strong demand for transport and industrial fuels to drive next year’s rebound. Consumption of diesel -- an economic barometer and the country’s most-used fuel -- will grow by more than 13%, as will demand for gasoline. Overall fuel demand in the current financial year, which runs to March 31, is expected to fall 8.5%.India’s economy pulled itself out of recession last quarter, helped by a boost in government spending and the reopening of an economy that’s mainly driven by domestic consumption. It was one of the few major economies to post growth in the final three months of 2020.A trend for more commuters to use personal cars -- instead of buses, trains and other modes of public transport -- is expected to drive India’s demand for gasoline.Demand for aviation fuel, which suffered the biggest blow, is estimated to grow more than 74% during 2021-22, but will remain a little lower than the pre-pandemic year, the PPAC’s projection showed.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.
(Bloomberg) -- OPEC+ is poised to agree a production increase this week as it seeks to cool a rapid rally in crude prices.There’s a widespread view within the group that the market can absorb additional barrels, according to people familiar with the deliberations. While the usual differences are present -- with Saudi Arabia cautious and Russia keen to open the taps -- all sides are ready to increase production, they said, asking not to be named because the information was private.That could put the group on track to implement the majority of the 1.5 million barrel-a-day output increase that’s up for debate on Thursday.An agreement to hike OPEC+ supply would be the latest sign that the global economy is recovering from the damage wrought by the coronavirus pandemic. The cartel has endured a year of pain, dominated by the deepest output cuts in its history. But the sacrifice has paid off, reviving oil prices back to pre-crisis levels above $60 a barrel.“Both the global economic outlook and oil market prospects show signs of continued improvement,” OPEC Secretary-General Mohammad Barkindo said at the opening of a meeting of the group’s technical experts on Tuesday. “The headwinds of uncertainty that shocked and disrupted the market last year continue to abate.”Brent crude fell in London for a fourth-straight session on Tuesday, dropping 1.6% to $62.70 a barrel. The global oil benchmark was still more than 20% higher for the year.There are two distinct elements to the production increase that the Organization of Petroleum Exporting Countries and it allies will debate this week.First, will the cartel proceed with a 500,000 barrel-a-day collective output hike in April? Second, how will Saudi Arabia phase out the extra supply reduction of 1 million barrels a day it’s been making voluntarily in February and March?Robust DemandRussia has been the most consistent advocate for the 500,000 barrel-a-day increase, and other members now largely agree that it should go ahead, according to people familiar with the matter.The top oil executive from the United Arab Emirates, which has also supported output hikes at recent OPEC+ meetings, gave a bullish assessment of the market on Tuesday.“Oil demand is robust,” Sultan Al Jaber, the chief executive officer of Abu Dhabi National Oil Co., said at the IHS Markit Ltd. CERAWeek virtual conference. “Demand will rise to above pre-Covid levels by the end of this year.”Adnoc has already signaled it’s preparing to open the taps, allocating customers greater volumes of Murban, Das and Upper Zakum crudes for April compared with March.Saudi ChoiceSaudi Arabia always said that its voluntary supply reduction would only last for two months, but seasoned OPEC-watchers have suggested that Riyadh could phase it out gradually.The kingdom will start to roll back its extra cut as planned in April, but is still discussing internally whether to return all of the barrels in a single month, or over a longer period, said people familiar with the deliberations. The decision will take into account the commissioning of the new 400,000 barrel-a-day Jizan refinery, which could affect both domestic crude consumption and exports, they said.At CERAWeek, Saudi Aramco CEO Amin Nasser struck a more cautious tone than his counterpart from the UAE, predicting strong demand in the second half of 2021, and a return to pre-Covid consumption next year.Whatever the Saudis decide, the global oil market is poised to receive its biggest supply boost since August, when OPEC+ first began the process of tapering the 9.7 million barrel-a-day cut agreed in April last year as the pandemic crushed demand.The group appears to think the market is ready for it. Even if OPEC+ boosts production by 2.4 million barrels a day between February and June -- the maximum amount allowed under the current deal -- it will still be able to clear the remnants of the 2020 supply glut by August, the secretariat’s analysts predicted on Tuesday.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.