Following a 6-percent weekly gain last week, oil prices were slightly up on Monday morning, erasing earlier losses as the U.S. dollar weakened again.

As of 10:39 a.m. EDT on Monday, WTI Crude was up 0.32 percent at $63.30 and Brent Crude was trading up 0.19 percent at $66.88.

The weaker U.S. dollar was supporting oil prices early on Monday as it makes oil cheaper to buy for holders of other currencies.

Price gains, however, were limited, in view of the second “tsunami” wave of COVID-19 cases in India, a major oil consumer and the third-largest importer of crude oil in the world.

The country has been reporting record daily new cases in recent days and on Monday, the capital New Delhi announced a six-day lockdown as hospitals are overwhelmed with patients with severe COVID symptoms. Earlier this month, the biggest city and financial center, Mumbai, was also placed on lockdown until the end of this month, threatening the recovery of fuel demand in the country.

Last week, a flurry of bullish news pushed oil higher by 6 percent for the week, despite the continued concerns about demand in India and other major economies. Related: Oil Demand Could Peak By 2026: Goldman Sachs

The U.S. weekly jobless claims hit their lowest since the pandemic started, while advance estimates showed that U.S. retail sales jumped by 9.8 percent in March 2021 from February, and by 27.7 percent compared to March 2020. The EIA reported a draw of 5.9 million barrels in U.S. crude oil inventories in the week to April 9, while both OPEC and the International Energy Agency (IEA) lifted their forecasts for this year’s global oil demand growth, due to expected stronger economies. 

Crude oil prices “closed above their recent ranges on Friday, but with global virus cases hitting new records, the prospect for a sustained rally at this stage seems limited,” Saxo Bank said on Monday.

“With the prospect of additional barrels over the coming months from OPEC+, Iran and the U.S. we see the upside potential in Brent crude limited to $70/b until vaccine rollouts significantly changes the demand dynamics,” Saxo Bank analysts added.   

By Tsvetana Paraskova for Oilprice.com

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