By Alex Lawler

LONDON (Reuters) -Oil rose to $67 a barrel on Monday as optimism over a strong demand rebound in countries including the United States and China countered concern about a surge in India’s coronavirus cases and higher OPEC+ oil supply.

India on Monday reported more than 300,000 new coronavirus cases for a 12th straight day. The new wave of the virus has already led to a drop in fuel sales in the world’s third-largest consumer in April.

Brent crude rose 29 cents, or 0.4%, to $67.05 a barrel by 1335 GMT. U.S. West Texas Intermediate added 28 cents, or 0.4%, to $63.86.

“India jitters are currently stopping oil prices from rising further,” said Rystad Energy analyst Louise Dickson. “Despite the demand downside in India, it’s very likely that oil will claw back towards $70 per barrel in the coming months as the global demand uptick tips the scale to positive.”

The U.S. and China, the world’s top two oil consumers, are expected to drive that demand recovery.

Brent has rallied almost 30% this year, recovering from last year’s historic lows thanks to record supply cuts by the Organization of the Petroleum Exporting Countries and its allies, together known as OPEC+.

“The technical picture continues to suggest that oil’s price recovery remains intact,” said Jeffrey Halley, analyst at brokerage OANDA.

Higher supply limited oil’s gains, however. OPEC+ decided last week to stick to a plan to boost supply slightly from May 1 and OPEC’s production climbed in April, led by a boost from Iran, a Reuters survey found. [OPEC/O]

In another development that could allow a further boost to Iranian supply, Tehran and world powers are holding talks to revive the 2015 nuclear deal.

Iran’s chief nuclear negotiator on Saturday said that Tehran expects U.S. sanctions on oil, banks and most individuals and institutions to be lifted.

(Additional reporting by Florence TanEditing by David Goodman and David Evans)