Crude edges lower near $61 with near-term demand concerns in focus

Crude edged lower in early Asian trading on concerns about the near-term demand outlook amid the uneven recovery from the pandemic.

Crude Futures in New York slid 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 U.S., New York City’s mayor urged a pause on reopening. In Southeast Asia, demand has hit a plateau and it appears unlikely to reach pre-virus levels until the end of the year or later.

Read More: Crude Oil Futures Curve at Risk of More Weakness as Demand Wanes

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 U.S. 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.

The prompt time spread for Brent was 10 cents a barrel in backwardation on Monday — 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.

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