However, Shanghai on Tuesday said it would lift some restrictions on neighborhoods where no new infections had been reported over the past two weeks. The news helped ease concerns around Chinese oil demand, offering a sort of “light at the end of the tunnel trade,” said Stephen Innes, managing partner at SPI Asset Management, in a daily note. However, “oil bulls have fingers crossed that light isn’t a Chinese COVID freight train at the other end of the tunnel,” he said.

On Tuesday, OPEC lowered its forecast for 2022 growth in oil demand to 3.7 million barrels a day, down 500,000 barrels a day from its previous forecast. The cut was “mostly reflecting” the organization’s lowered 2022 economic outlook, OPEC said in its monthly report.

Separately, the EIA cut its forecast for global consumption of petroleum and liquid fuels on Tuesday. It expects consumption to average 99.8 million barrels a day for 2022, down 800,000 barrels from the March forecast. The government agency also reduced its 2022 price forecasts for WTI and Brent, bur raised its 2023 price forecasts for both grades.

Meanwhile, a coordinated release of crude oil by the U.S. and other countries from strategic reserves, announced last week, was also cited as a factor in the recent pullback for crude prices. The Biden administration plans to allow high-ethanol content gasoline to be sold during the summer in an effort to help tamp down high fuel prices, according to senior administration officials. The decision would allow gasoline with 15% ethanol to be sold between June 1 and Sept. 15. Normally only 10% ethanol blend is allowed to be sold during that period to reduce smog.

Natural-gas futures extended their gain to more than a 13-year high, “as large swaths of the northern U.S. and Southern Canada experience a prolonged winter,” said Vinicius Romano, senior analyst at Rystad Energy, in a note. “The elevated domestic and export demand from Europe has brought U.S. storages to a lower-than-average level at this time of the year sustaining such prices.”

The monthly EIA report Tuesday forecasts an average 2022 U.S. natural-gas price of $5.23 this year, up 32% from the March forecast, with U.S. liquefied natural gas exports likely averaging 12.2 billion cubic feet a day for the year, up 25% from 2021.

The EIA’s weekly petroleum supply report is due Wednesday. On average, analysts forecast a climb of 300,000 barrels in crude stocks for the week ended April 8, but also see supply declines of 800,000 barrels for gasoline and 1.5 million barrels for distillates, according to a survey by S&P Global Commodity Insights.