By Peter Nurse
Investing.com — Crude oil prices traded higher Tuesday, helped by signs of a global economic recovery as a group of top oil producers get together to review their production plans.
U.S. Gasoline RBOB Futures rose 1%, to $2.0091 a gallon.
Technical experts from the Organization of Petroleum Exporting Countries issued a report on Monday projecting a strong recovery in global oil demand, to 6 million barrels a day, this year.
A panel of ministers that monitors the oil market is now meeting to decide whether the full OPEC+ meeting, which also includes Russia, needs to discuss changing output plans.
This projection of a recovery in oil demand is based on the global economic improvement as ramped-up vaccination programs lead to reopenings in the major economies.
Earlier Tuesday, the German government raised its growth forecast for Europe’s largest economy to 3.5% from a previous estimate of 3% as it expects household spending to support the recovery once Covid-19 restrictions are lifted.
U.S. GDP figures for the first quarter will be released on Thursday, and are expected to show growth of 6.1% in the first three months of the year, up from 4.3% in the final quarter of last year.
Sentiment in the sector was also helped by BP (NYSE:BP)’s statement that it will resume stock buybacks in the third quarter, confident that it can generate free cash flow at crude prices above $45 a barrel.
However, there is a fly in the ointment – surging coronavirus infections in Brazil, Japan and in particular India, the third-largest importer in the world.
“There are clearly some concerns around the demand outlook, particularly over how the Covid-19 situation is developing in India. The big question is whether OPEC+ feels that the situation is bad enough to alter its planned production easing from 1 May,” said analysts at ING, in a note.
Elsewhere, the American Petroleum Institute will disclose its latest data on U.S. crude and product stockpiles later Tuesday. Last week the industry body reported that U.S. crude supplies increased by 436,000 barrels.
Crude Oil Higher; OPEC+ Meeting in Focus
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