UPDATE 9-Oil climbs nearly 2% as travel seen rising

Reuters

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    * U.S. crude stockpiles fall -7.688, traders say citing
APIDemand
boost in U.S. and Europe bolsters sentiment 
    * Strong U.S. economic outlook and weaker dollar also
support 
    * India's soaring COVID-19 infections limit demand outlook
    * 

 (New throughout, adds post-settlement trade)
    By Jessica Resnick-Ault
    NEW YORK, May 4 (Reuters) - Oil prices rose nearly 2% on
Tuesday after more U.S. states eased lockdowns and the European
Union sought to attract travellers, though soaring COVID-19
cases in India capped gains.
    Futures strengthened in post-settlement trade after American
Petroleum Institute estimates of U.S. crude inventories fell
more than expected, according to traders.
    Brent crude  LCOc1  futures settled at $68.88 a barrel,
up$1.32, or 1.95 percent. The global benchmark continued to rise
after the API data was issued, and was trading $1.80 at $69.36 a
barrel by 4:40 p.m. ET. (2040 GMT)
    U.S. West Texas Intermediate (WTI) crude  CLc1  futures rose
by $1.20, or 1.86%, to settle at $65.69 after a 1.4% jump on
Monday. In post-settlement trade the contract traded up $1.65,
or 2.56% at $66.14 a barrel. 
    "Markets were optimistic coming into the day, boosted by
flight movement between U.S. and Europe," said Phil Flynn,
senior analyst at Price Futures Group in Chicago. Demand for
diesel fuel, including jet, has suffered during the pandemic,
weighing down global oil markets. 
    Prices are being supported by the prospect of a pick-up in
fuel demand as New York state, New Jersey and Connecticut look
to ease pandemic curbs and the EU plans to open up to foreign
visitors who have been vaccinated, analysts said.
 urn:newsml:reuters.com:*:nL1N2MQ19O urn:newsml:reuters.com:*:nL8N2MQ1MJ
    "Yesterday's stock market strength is being followed through
this morning in the oil market ... the market focuses on the
successful rollout of vaccine programmes in the U.S. and in
other developed countries and not on the devastation in India
and Brazil."
    Traders saw further signs of rising U.S. crude demand in the
API's stockpile data issued late Tuesday. Crude stocks fell by
7.7 million barrels in the week ended April 30. Gasoline
inventories fell by 5.3 million barrels and distillate stocks
fell by 3.5 million barrels, the data showed, according to the
sources, who spoke on condition of anonymity.  urn:newsml:reuters.com:*:nN9N2HQ013 The
U.S. Energy Information Administration weekly statistics are due
to be released Wednesday. 
    Five analysts polled by Reuters estimated on average that
U.S. crude inventories  USOILC=ECI  fell by 2.2 million barrels
in the week to April 30. Oil inventories rose in the previous
two weeks.  urn:newsml:reuters.com:*:nL4N2MQ2JS
    The rate of refinery utilisation  USOIRU=ECI  was expected
to have increased by 0.5 percentage point last week, from 85.4%
of total capacity in the week ended April 23, the poll showed.
    A weaker dollar, hit by an unexpected slowdown in U.S.
manufacturing growth, also helped to shore up oil prices on
Tuesday. The lower dollar makes oil more attractive to buyers
holding other currencies.  urn:newsml:reuters.com:*:nL1N2MR014
    In India, the total number of infections surpassed 20
million after the country again registered more than 300,000 new
cases, which is expected to hit fuel demand in the world's
second-most populous country.  urn:newsml:reuters.com:*:nL1N2MR0P5
    "Strong demand forecasts for the second part of 2021 are
providing a bullish seat for traders to drive rallies, not
allowing any strong negative price reaction to drag for long,
even at times of crisis, such as the recent one in India," said
Rystad Energy analyst Louise Dickson. 
    "In fact, looking at balances going forward, prices will
likely climb again to about $70 per barrel in the coming months,
unless we see another policy change by OPEC+."

 (Reporting by Julia Payne in London, Sonali Paul in Melbourne
and Roslan Khasawneh in Singapore; Editing by David Goodman,
Steve Orlofsky, Cynthia Osterman and David Gregorio)
 ((Jessica.Resnick-Ault@thomsonreuters.com; +1 332 219 1145;))

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