Oil edged lower in Asian trading on concerns about the near-term demand outlook amid the uneven recovery from the pandemic.
Futures in New York slipped 0.6% to trade near $61 a barrel after two days of gains. Fuel consumption is facing a setback after some countries in Europe extended or reimposed lockdowns, while in the US, New York City’s mayor urged a pause on reopening. In Southeast Asia, demand has hit a plateau and is unlikely to reach pre-virus levels until the end of the year or later.
US crude stockpiles, meanwhile, probably expanded by 1.2 million barrels last week, according to the median estimate in a Bloomberg survey. If confirmed by government data on Wednesday, it would be a fifth weekly increase, the longest run of gains since May. Industry figures are due later Tuesday.
While oil’s sustained advance this year stalled recently, there is confidence in the longer-term outlook as Covid-19 vaccinations are rolled out worldwide and as the US unleashes significant stimulus. OPEC+ members are continuing to put a floor under prices through a series of output cuts, with the group scheduled to meet next week to determine production policy for May.
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The prompt timespread for Brent was 6 cents a barrel in backwardation -- a bullish structure where near-dated contracts are more expensive than later-dated ones. That compares with 67 cents at the start of the month.