By Julia Payne
LONDON, Apr 9 (Reuters) – Oil prices fell slightly on Friday due to increased supply from large producers and amid concerns about a mixed outlook over the impact of the COVID-19 pandemic on fuel demand.
* At 1014 GMT, June Brent was down 16 cents, or 0.25%, at $ 63.04 a barrel, while May’s West Texas Intermediate (WTI) crude was down 7 cents to 59. 53 dollars.
* Both contracts are headed for a 2% to 3% drop this week, but Brent is far from the low of 60.47 it touched two weeks ago. The decision by the Organization of the Petroleum Exporting Countries (OPEC) and its allies, a group known as OPEC +, to increase supplies by 2 million barrels a day between May and June put pressure on the market.
* Analysts, however, expect global oil inventories to continue falling and forecast an acceleration in fuel demand in the second half of the year as the global economic recovery gathers momentum.
* “There is a big reduction in inventories, so we are in the process of rebalancing,” said Virendra Chauhan, analyst at Energy Aspects.
* However, physical markets still need to recover before prices and month-to-month spreads can pick up, he added.
* Despite all the optimism, renewed lockdowns by the coronavirus in some parts of the world and problems with vaccination programs could threaten the outlook for oil demand.
* Stephen Innes, Axi’s chief global markets strategist, said oil prices are expected to trade in a $ 60- $ 70 range as investors weigh these factors.
* “Oil is currently in a wait-and-see mode, with market participants looking at vaccination rates to understand when oil demand will pick up further and nuclear talks in Vienna to see when more barrels could return. Iranians, “said UBS commodities analyst Giovanni Staunovo.
Envoys from China and Russia to Iran’s nuclear talks said on Friday there was progress in efforts to get Iran and the United States back into compliance with the 2015 nuclear deal and for all parties to meet again next week.
(Reporting by Florence Tan in Singapore and Julia Payne in London; Edited in Spanish by Ricardo Figueroa)