Business

Oil slips on concerns that OPEC+ may be set to pump up supply By Reuters



© Reuters. Views of Total Grandpuits oil refinery

By Sonali Paul

MELBOURNE (Reuters) – Oil prices were down in early trade on Wednesday, extending several days of losses, amid uncertainty over how much supply producing countries will push to restore to the market at a meeting this week while the coronavirus pandemic persists.

U.S. West Texas Intermediate (WTI) crude futures fell 18 cents, or 0.3%, to $59.57 a barrel by 0122 GMT, down 6% since Feb. 25, when they hit their highest close since May 2019.

futures dipped 7 cents, or 0.1%, to $62.63 a barrel, down 7% from a 13-month high hit last week.

The Organization of the Petroleum Exporting Countries (OPEC) and allies, together called OPEC+, are set to meet on Thursday, at a time when they are generally positive on the oil market outlook compared with a year ago when they slashed supply to boost prices.

OPEC+ sources last week said an output increase of 500,000 barrels per day (bpd) looked possible without building inventories. Saudi Arabia’s voluntary cut of 1 million bpd is due to end in April, but it is unclear whether it will restore all of that supply right away.

“The days of GDP and oil demand figures being in the red because of the pandemic-induced shock appear to be behind us,” OPEC Secretary General Mohammad Barkindo said on Tuesday, speaking ahead of a meeting of OPEC+’s Joint Technical Committee (JTC).

However, a JTC document seen by Reuters cited continued uncertainties in physical markets and risks of the coronavirus pandemic persisting with COVID-19 mutations.

READ  Facebook's $5.7bn bet on India's richest man Mukesh Ambani

“The question the group must answer this week is whether the rebound in demand is strong enough to sustain an increase in output,” ANZ analysts said in a note.

Reinforcing concerns of potential oversupply, the American Petroleum Institute industry group reported stocks rose by 7.4 million barrels in the week to Feb. 26, in stark contrast to analysts’ estimates for a draw of 928,000 barrels. [API/S]

“The unexpectedly large crude inventories build hit at a worrying time for oil bulls,” said Stephen Innes, global market strategist at Axi.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.





READ SOURCE

Leave a Reply

This website uses cookies. By continuing to use this site, you accept our use of cookies.