Oil falling in Asia while demand in India continues low

Oil was falling Thursday morning in Asia, with demand from India continuing to fall.

Brent oil futures dropped 0.69% to $71.72 by 12:16 AM ET (4:16 AM GMT) and WTI futures were below 0.69% to $69.48.

India, the third-largest oil customer, posted its weakest fuel demand level in May after August 2020. Economic activity continued restricted due to increasing coronavirus cases, which exceeded 29 million as of June 10.

Wednesday’s U.S. crude oil supply data from the U.S. Energy Information Administration (EIA) confirmed a draw of 5.241 million barrels for the week closing June 4.

Forecasts made by Investing.com foretold a 2.036 million-barrel draw, while a 5.080 million-barrel interest was reported during the prior week.

Crude oil supply data from the American Petroleum Institute published the day before bestowed a draw of 2.108 million barrels.

While crude inventories declined, the demand outlook was different in the U.S. Gasoline stocks increased by 7 million barrels to 241 million, related to an estimate for a 698,000 barrel increase. Diesel and heating oil stockpiles also grew by 4.4 million barrels, connected to an expected 1.4 million upgrade.

Markets had been optimistic on-demand as the U.S. starts the peak summer driving season. An expedition in (coronavirus) vaccinations and rising traffic numbers are a plus for the demand for transportation fuel.

Nevertheless, this data highlights it won’t be a quiet road back to recovery, analysts from ANZ Research stated in a note.

U.S. oil stockpiles, including the Strategic Petroleum Reserve (SPR), declined for the 11th straight week as refiners increased production.

Meantime, Libya’s Waha Oil Co will reportedly return to normal production operations on Thursday after repairing a leak on a pipeline. The leak, recorded on Monday, supposedly reduced oil production to 130,000 barrels per day on Wednesday, from 285,000 bpd a day earlier.