(Bloomberg) — Oil was steady near $60 a barrel in early Asian trading as investors assessed an uneven demand outlook amid rising Covid-19 cases in some regions and an impending increase in supply.
Futures in New York edged higher after climbing 0.6% Monday. Pockets of higher fuel consumption are emerging as vaccination rates increase, but the flare-up of cases is leading to renewed lockdowns and restrictions in some countries. Adding to the bearish outlook is the prospect for more supply from the U.S. next month, which will coincide with an uptick in output from OPEC+.
Oil remains stuck near $60 a barrel after a rally faltered in mid-March amid concerns over near-term demand following the resurgence of the virus. Despite the recovery wobbles, OPEC+ is betting on higher consumption in the coming months and will soon start adding more crude to the market.
Saudi Arabia, meanwhile, was once again the focus of an assault by Yemen’s Houthis, with the group targeting oil facilities with explosive-laden drones. The frequency of attacks has increased this year, but they have rarely claimed lives or caused extensive damage.
Brent’s prompt timespread was 42 cents a barrel in backwardation — a bullish market structure where near-dated contracts are more expensive than later-dated ones — on Monday. That compares with 40 cents at the start of April.
Oil production from the Permian Basin, the most prolific U.S. shale patch, is expected to expand to levels not seen since the start of the pandemic next month, according to data from the Energy Information Administration. Output is set to climb to about 4.47 million barrels a day in May.
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