0314 GMT: Crude oil futures edged up during midmorning trade in Asia April 13 on bullishness due to improved economic prospects, even as the market remains weighed down by the possibility of more OPEC+ supply and rising COVID-19 infections.
At 11:14 am Singapore time (0314 GMT), the ICE June Brent contract was 35 cents/b (0.55%) higher than the April 12 settle at $63.63/b while the NYMEX May light sweet crude contract was up 31 cents/b (0.52%) at $60.01/b.
Oil prices have been hovering near the $63/b mark since the week ended April 10 due to a tug of war between investors optimistic about increased oil demand on the back of a US-led global economic recovery, and investors wary of the impending increase in OPEC+ production quotas from May onward.
"Oil prices have been rangebound lately, as the market has attempted to strike a balance between brighter growth prospects and rising output from OPEC+ in coming months," Margaret Yang, DailyFX strategist, told S&P Global Platts on April 13.
Analysts have also said the recent surge in COVID-19 infections in Europe and India has stunted any upside to the market. Stephen Innes, chief global market strategist at Axi, said in an April 13 note that despite expectations of an increase in oil and gasoline demand in the summer, the market "feels completely uninspired" amid the escalation of the pandemic.
To decide on a trajectory for oil prices, the market is currently awaiting fresh pricing cues. Yang said "this week, traders will be particularly monitoring the Chinese trade balance, and US inflation and retail sales figures for clues regarding the economic health of these countries."
In addition, the market will also be tuned into newsflow from talks over a US-Iran nuclear deal, expected to resume in Vienna on April 14. An attack on Iran's Natanz nuclear facility over the weekend will complicate discussions, but a deal could see the removal of sanctions on Tehran's oil sector and lead to an influx of Iranian oil into the market.
Innes said while any progress in the talks would affect sentiment in the market, the impact could be muted as "Iran had reportedly been ramping up production and exports since the US elections last year" and the "supply impact is already getting baked into the prices."
In inventory news, analysts surveyed by Platts said they expect US commercial crude inventories to have fallen 2.9 million barrels last week to around 495.4 million barrels from an uptick in refinery demand. US refinery runs are expected to have reached 15.18 million b/d for the week ended April 9, S&P Global Platts Analytics data showed, putting refinery crude demand at the highest since the week ended March 20, 2020.
Market participants will be looking toward data from the American Petroleum Institute and the US Energy Information Administration, due to be released on April 13 and April 14, respectively, for more comprehensive inventory data.
