WASHINGTON (DTN) -- In early trade Tuesday, oil futures nearest delivery on the New York Mercantile Exchange and Brent crude traded on the Intercontinental Exchange moved higher, with the U.S. crude benchmark crossing above $62 per barrel (bbl) as traders monitor the upcoming ministerial meeting among Organization of the Petroleum Exporting Countries and Russia-led partners, moved forward to early Tuesday afternoon, for indications that the group might pause a planned production increase amid a softer demand outlook in India and Japan, the world's third and fourth largest oil consuming countries.
The group, known as OPEC+, will hold its Joint Ministerial Monitoring Committee meeting Tuesday instead of Wednesday as was previously planned, according to a statement released Tuesday morning. On Monday, OPEC+ Joint Technical Committee expressed concern over the rise in COVID-19 infections in parts of Asia -- a key region for global oil demand growth, prompting speculation the alliance might pause a planned production increase beginning next month.
In India, the recent surge in COVID-19 cases will likely shave 9% from the fuel demand this year, prompting the nation's largest refineries to cut run rates this month, according to industry sources.
Nevertheless, OPEC+ technical panel modestly lifted global demand projections to 6 million barrels per day (bpd) this year compared with 5.95 million bpd forecasted in OPEC's April 13 Monthly Oil Market Report.
On April 1, the coalition agreed to boost output by 350,000 bpd in both May and June and increase output by another 450,000 bpd in July. On top of that, Saudi Arabia said it would roll back its unilateral extra 1 million bpd cut, adding 250,000 bpd in May, 350,000 bpd in June and 400,000 bpd in July. If realized, the OPEC+ agreement would add 1.15 million bpd in crude production that joined by the Saudis would lift OPEC+ output by 2.15 million bpd by July.
Also of note, commercial crude oil inventories held in the Organization for Economic Cooperation and Development have now fallen in line with the five-year average from an all-time peak at 249 million bbl in July 2020, according to the International Energy Agency.
In outside markets, the U.S. Dollar Index is trading modestly higher against a basket of global peers, reversing off six-week low 90.975 as investors watch the beginning of Federal Open Market Committee meeting scheduled for today and Wednesday. At present, analysts aren't expecting any changes from the Fed's accommodative policy, which includes record-low interest rates and $120 billion a month in bond purchases.
Additionally, the U.S. consumer confidence index scheduled for release at 10:00 a.m. ET is expected to show further improvement in consumers assessment of current economic conditions from last month's multi-month high reading of 109.7. March's report showed a significant improvement in the labor market assessment and optimism about consumers' short-term outlook.
U.S. economic data since mid-March continue to show improving conditions in the labor market, manufacturing, and service industries. The Atlanta Fed's GDPNow estimate for real gross domestic product growth in the first quarter stands at 8.3%, however some economists suggest that figure likely exceeds 9%. The Bureau of Economic Analysis will release its first estimate for U.S. first quarter GDP at 8:30 a.m. ET Thursday.
In early trade, NYMEX June West Texas Intermediate futures gained $0.43 to $62.33 bbl, and ICE June Brent futures advanced $0.37 to trade just above $66 bbl. Next-month delivery July ICE Brent futures trading with a $0.56 discount to the expiring contact. NYMEX May ULSD futures surged 2 cents to near $1.90 gallon, with next-month delivery contact trading at $1.9018 gallon. NYMEX May RBOB futures added 1.71 cents to $1.9957 gallon and the June contact expanded its premium to 1.06 cents, trading near $2.0065.
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