On Monday, oil prices are expected to make a downward correction following a surge last week. At the moment of writing this material, June futures on Brent benchmark grade were trading at about $66.53 a barrel, 0.36% down from the closing price on Friday, April 16. According to the London Futures Exchange, ICE, Brent crude closed last trading week at $66.7 a barrel.

Meanwhile, WTI is also trading with a minor decline since early morning. In the European pre-market, WTI June futures were trading at $63.03 while May futures were trading at about $63 a barrel. Thus, June WTI futures are now 0.25% down from the closing price of Friday and May futures are 0.21% down.

Commodity experts say that the ongoing downward correction of oil prices was caused by the fact of profit taking by energy investors following a sharp appreciation of oil quotes last week. Remarkably, oil prices surged almost 6% over the last trading week, having found support from positive forecasts for a stabilization of the global economy in anticipation of growing demand for oil.

Another cause for a correctional decline is resurgence of coronavirus cases in Japan and India. Tokyo authorities do not rule out that the state of emergency could be announced again in the capital city in the nearest days. Moreover, strict lockdown measures are likely to be imposed in other Japan's prefectures where the highest rates have been recorded. In India, the total number of infected people has almost reached 15 million. India reported a fresh anti-record of 261K new cases over the weekend.

A year later since the pandemic outbreak, the oil market is still vulnerable to the news on the coronavirus front. The pandemic situation determines global demand for crude oil that, in turn, shapes commodity prices. Amid upbeat macroeconomic stats from the US and Europe, demand for oil is reviving, thus propelling a rally of oil prices. These factors dragged down global oil inventories which have been amassed around the world due to the coronavirus restrictions.

According to the International Energy Agency, global crude stocks contracted to 57 million barrels by February 2021 whereas global inventories were as high as 249 million barrels in the summer 2020 during the pandemic peak. In other words, this winter oil inventories shrank to 1/5 from the accumulated volume, Bloomberg estimates. As of today, crude stocks contracted to a greater degree amid growing demand. From the viewpoint of Bloomberg experts, available oil inventories have been nearly depleted that will lead to a considerable appreciation of petroleum products in the second half of the year.

According to Bloomberg estimates, at present only China possesses enough petroleum products which have been piled up for its oil processing plants. As for the US, the country is running out of crude oil with its oil inventories being at the pre-pandemic level. Notably, the US oil stores at the Eastern coast sank to the lowest mark over the recent three decades. Besides, the periodical notes that crude oil stored in tankers has also fallen a lot. Analytical firm IHS estimates that the total amount of US oil stocks tumbled 27% over the recent two weeks.

Analysts at Citigroup foresee a further decline in global crude stocks due to reviving demand for crude oil. Experts reckon that oil surplus accumulated during the pandemic is likely to contract roughly by 2.2 million barrels per day in the second half of the year. Such a notable decrease will set the stage for the uptrend in both benchmark grades. As a result, Brent prices could leap as high as $74 a barrel or even more in the second half of the year, Citigroup predicts.