Oil slips as traders expect Opec+ to ease supply cuts

Easing supply cuts: Pump jacks operating near Loco Hillsin Eddy County, New Mexico, US. Opec and Russia are expected to ease their supply cuts to 7.7 million bpd as global oil demand has recovered and prices have bounced back. — AFP

SINGAPORE: Oil slipped nearly 1% on Monday as traders eyed an Opec technical meeting this week which is expected to recommend an easing in supply cuts that have been propping up crude prices.

Brent crude fell 29 cents, or 0.7%, to US$42.95 a barrel by 0510 GMT while US West Texas Intermediate crude was at US$40.25 a barrel, down 30 cents, or 0.7%.

Oil was little changed last week as a resurgence of coronavirus cases prompted several US states to impose tighter travel restrictions that could dampen oil demand recovery at the world’s largest consumer.

However, prices climbed more than 2% on Friday after the International Energy Agency raised its 2020 oil demand forecast by 400,000 barrels per day. Oil prices have recovered sharply from multi-decade lows in April as the Organization of the Petroleum Exporting Countries and allies including Russia, a group known as Opec+, cut output by a record 9.7 million barrels per day (bpd) over May to July.

Opec’s Joint Ministerial Monitoring Committee (JMMC) will meet today and tomorrow to recommend the next level of cuts after compliance in the group hit 107% in June, up from 77% in May.

Opec and Russia are expected to ease their supply cuts to 7.7 million bpd as global oil demand has recovered and prices have bounced back, Opec+ sources have told Reuters. “They’ve done a good job of bringing prices as high as expected in the mid-term so they should be very careful about ruining sentiment, ” Tony Nunan, a Tokyo-based senior risk manager at Mitsubishi Corp said.

Higher prices have prompted some US producers to start drilling again even as the number of operating oil and natural gas rigs hit a record low for a 10th straight week.

“If you want to keep drilling down, then you’re going to have to keep prices around this level, ” Nunan said.

Libya exported its first crude cargo in six months on Friday after a blockade by eastern forces, but then re-imposed force majeure on all oil exports on Sunday. Its National Oil Corp accused the United Arab Emirates of instructing the eastern forces in Libya’s civil war to reimpose the blockade. — Reuters

Article type: metered
User Type: anonymous web
User Status:
Campaign ID: 1
Cxense type: free
User access status: 3
Join our Telegram channel to get our Evening Alerts and breaking news highlights

Oil price , Opec , production cuts ,


Next In Business News

GLOBAL-MARKETS-Rising Treasury yields hit tech stocks
PBOC promises to protect consumers as Evergrande teeters
MyNews losses widen due to strict Covid-19 measures�
Dolomite Corp classified as PN17, unable to pay debts
AirAsia X posts record RM24.6bil net loss in Apr-June quarter�
Straits Energy eyes 5G rollout projects with partner Seashore�
Crude oil at 3-year high, Brent nears US$80 a barrel amid supply constraints
Protasco registers RM6.4mil profit in Q2, boosted by road maintenance works
Muted market response to 12MP
Malaysia's DuitNow, Singapore's PayNow to link in 2022

Stories You'll Enjoy