DTN Oil

WASHINGTON (DTN) -- In early trade Monday, oil futures nearest delivery on the New York Mercantile Exchange and Brent crude traded on the Intercontinental Exchange slipped, with the U.S. crude benchmark trading near $63 per barrel (bbl) as concern reemerged over a near-term recovery in demand fueled by rising COVID-19 infections in India and Brazil, with the downside countered by a rapidly weakening U.S. Dollar Index joined with upbeat economic data for the United States and China that signals strong post-pandemic rebounds in the world's two largest economies.

Greenbacks dropped to a fresh six-week low 91.025 early Monday despite a string of bullish economic data on U.S. retail sales, unemployment claims and consumer sentiment followed by a league of solid figures on China's first quarter's economic performance. China's gross domestic product expanded at an 18.3% annualized rate during first three months of the year, according to National Bureau of Statistics, slightly missing expectations for a 19% surge. The accelerated growth comes off a sharp contraction in the first quarter 2020, when the economy shrank by 6.8% during the height of the COVID-19 outbreak.

Beijing also said March's retail sales rose 34.2% year on year, topping expectations for a 28% growth rate. Industrial production missed market calls by more than 3% but remained strong with a 17.2% reading. The slower growth in industrial production coincided with China's annual Spring Festival when many workers take holiday leave and therefore might not be indicative of a new trend developing in the world's second largest economy.

So far, China's economic data firmly put the country on pace to match its 2021 growth estimates while powering the region's broader post-pandemic recovery.

Domestically, a blowout retail sales number for March, rapidly improving jobless claims and modest levels of consumer price inflation continue to feed into expectations for strong economic growth in the second half of the year. U.S. economy is now forecast to be larger by the end of 2022 than it would have been if the pandemic had not happened, according to the Organization for Economic Cooperation and Development. In the first nine months of 2020, American households are estimated to have saved an "excess" of $3 trillion on the back of reduced opportunities to spend joined by generous government payouts.

Offsetting some of the positive sentiment, global COVID-19 cases topped five million cases on Friday, driven by worsening COVID-19 outbreaks in India and Brazil. The Indian capital of New Delhi will enact a strict lockdown for six days starting Monday, according to city officials, adding the healthcare system has reached a breaking point.

In early trade, NYMEX West Texas Intermediate for May delivery slipped 20 cents to below $63 bbl at $62.93 bbl and the June Brent contract on ICE traded eased 19 cents to $66.58 bbl. NYMEX May ULSD futures fell 0.98cent to $1.8858 gallon and May RBOB futures declined 0.62 cent to $2.0338 gallon.

Liubov Georges can be reached at liubov.georges@dtn.com