The American Petroleum Institute (API) on Tuesday reported a modest draw in crude oil inventories of 2.618 million barrels for the week ending April 2.

Analysts had predicted a smaller draw of 1.436 million barrels for the week. In the previous week, the API reported a build in oil inventories of 3.910 million barrels after analysts had predicted a much smaller build of 107,000 barrels.

After tanking on Monday, oil prices were trading up on the day prior to the data release as fears in the market calmed regarding additional supplies that might be brought onto the market should the talks over the Iranian nuclear deal end with lifting U.S. sanctions. WTI Closed at $59.33, or 1.28% higher on the day. Brent crude traded up at $62.79 per barrel or 1.03% up on the day.

As U.S. oil inventories shrink, U.S. oil production rose modestly to 11.1 million bpd during the week ending March 26, according to the latest data from the Energy Information Administration. It is the second increase in as many weeks. The API reported a build in gasoline inventories of 4.553 million barrels for the week ending April 2—after the previous week’s 6.012-million-barrel barrel draw. Analysts had expected a 221,000 barrel draw for the week. Distillate stocks saw an increase in inventories this week of 2.810 million barrels for the week, after last week’s 2.595-million-barrel increase. Cushing inventory figures fell by 84,000 barrels.

Goldman Sachs is still bullish on oil and anticipates strong demand that would require OPEC+ putting another 2 million barrels per day (bpd) on the market in the third quarter, after the around 2 million bpd that the alliance and Saudi Arabia decided to return between May and July. “We forecast a larger rebound in oil demand this summer than OPEC and the IEA, requiring an additional 2 mb/d increase in OPEC+ production from July to October,” Goldman Sachs said, as quoted by CN Wire. The investment bank expects excess oil inventories to normalize by the fall of 2021.

Last week’s OPEC+ agreement to ease the cuts “comes a month sooner than we had expected,” Goldman Sachs says, noting that the increases for June and July are smaller than its analysts had anticipated. OPEC+ decided on Thursday to gradually increase collective oil production by over 1 million bpd over the next three months. The group will raise its production by 350,000 bpd in each of May and June and by more than 400,000 bpd in July. Additionally, Saudi Arabia will also gradually ease its extra unilateral cut of 1 million bpd over the course of the next few months, beginning with monthly production increases of 250,000 bpd in each of May and June.

Goldman Sachs continues to hold a bullish view on oil demand, despite the recent concerns about demand in Europe and India, which sent oil prices down by 2 percent early on Monday. At the beginning of March, Goldman Sachs said it expected Brent Crude prices to hit $80 a barrel in the third quarter this year, up by $5 compared to the previous forecast issued two weeks earlier. Even after the sell-off in oil in mid-March, Goldman said that the “big breather” was a buying opportunity for oil and continued to forecast Brent hitting $80 per barrel in the summer.

OPEC+ has lowered its oil demand growth forecast for this year by 300,000 barrels per day (bpd), a report from its experts panel meeting seen by Reuters showed. The Organization of the Petroleum Exporting Countries and allies, together called OPEC+, are set to meet on Thursday, to decide on output policy. “Given this pessimistic outlook, it seems likely that the production quotas will be left in place for another month,” said Commerzbank analyst Eugen Weinberg. OPEC+ are currently curbing output by just over 7 million bpd in a bid to support prices and reduce oversupply. Saudi Arabia has added to those cuts with an additional one million bpd. “The oil market is still playing a guessing game today as to what supply policy OPEC+ will set out at tomorrow’s meeting, but the $64 per barrel Brent price signals that traders expect a cautious approach from the alliance,” said Rystad Energy’s analyst Louise Dickson.

Kuwait’s Oil Minister Oil Mohammad Abdulatif al-Fares expressed “cautious optimism” on Wednesday that global oil demand will improve as COVID-19 vaccination programmes gather pace and industrial output recovers. OPEC oil output rose in March as higher supply from Iran countered reductions by other members under a pact with allies, a Reuters survey found, a headwind for its supply-limiting efforts if Tehran’s boost is sustained.

Meanwhile, data from the American Petroleum Institute showed a bigger than expected build in U.S. crude stocks. Traders will be eying data later on Wednesday from the U.S. Energy Information (EIA) for further guidance. Oil prices found some support as China’s manufacturing activity expanded at the quickest pace in three months in March as factories cranked up production after a brief lull during the Lunar New Year holidays.

Prices, however, were still headed for a third consecutive weekly loss. Brent Crude settled 4.23% higher at $64.57 per barrel, after dropping 3.8% on Thursday. WTI Crude advanced 4.12% to settle at $60.97 per barrel, having tumbled 4.3% a day earlier. Both benchmarks were on track for a weekly loss of more than 3%, following a more than 6% decline last week.

The trapped container ship is blocking traffic in the Suez Canal, one of the world’s busiest shipping channels for oil and refined fuels, grain and other trade between Asia and Europe. Officials stopped all ships entering the canal on Thursday, and a salvage company said the vessel may take weeks to free. “Expectations that the blockage of the Suez Canal may last for weeks raised fears of supply tightness in oil markets,” said Nissan Securities researcher Yasushi Osada.

“But lingering worries that a fresh wave of lock downs in Europe and elsewhere may slow a recovery of global fuel demand are expected to limit price gains,” he said. Countries in Europe are renewing restrictions to curb the spread of COVID-19, which will likely reduce fuel demand from the region. Germany, Europe’s largest economy, has seen its biggest increase in coronavirus cases since January. In parts of western India, authorities ordered people indoors as new infections hit the highest level in five months.

The oil market was also under pressure as producers had difficulty selling to Asia, especially China. Asian buyers instead took cheaper oil from storage while refinery maintenance has reduced demand, industry sources said.

The gains appeared to stabilize the market that had slumped after early this month, when oil prices hit their highest levels this year earlier on expectations for demand recovery that have since been dashed as European nations re-entered lockdowns to halt another wave of the pandemic. Oil has recovered from historic lows reached last year as OPEC and its allies made record output cuts. On Tuesday, both benchmarks touched their lowest since February. A giant container ship has been blocking the Suez Canal for more than a day, but it has been partially refloated, with traffic along the fastest shipping route from Europe to Asia expected to resume soon, port agent GAC said on Wednesday. “Price support is coming courtesy of a transport blockage,” said Stephen Brennock of oil broker PVM. “Yet market sentiment will likely struggle to shake off its newfound bearish trend.”

Oil prices briefly pared gains after U.S. Energy Information Administration data showed crude, gasoline and distillate stocks rose last week despite refinery runs recovering after a winter storm shut Texas refineries last month. “The refiners are coming out of maintenance and recovering from the power outages. The expectation is now that they’re getting back to work, we will see crude inventories trending lower in the coming weeks,” said Phil Flynn, senior analyst at Price Futures Group in Chicago.

Italy, France and other European countries have re-imposed movement restrictions. But German Chancellor Angela Merkel said she was reversing a decision for a stricter Easter shutdown. Germany is Europe’s biggest oil consumer.

OPEC and its allies, known as OPEC+, meet on April 1 to consider whether to unwind more of their output cuts.