Oil price falls 1% on OPEC+ oversupply


  • Energy
  • Friday, 21 Aug 2020

Brent crude fell 47 cents, or 1%, to settle at US$44.90 a barrel while West Texas Intermediate (WTI) for September delivery ended the session 35 cents, or 0.8% lower, at $42.58 a barrel on the last day of trading. The more active October WTI contract ended down 29 cents, or 0.7%, at $42.82 a barrel.

NEW YORK: Oil fell 1% on Thursday after Reuters reported OPEC+ needed to address daily oversupply of more than 2 million barrels, and the number of U.S. unemployment benefit claims rose unexpectedly, signalling a slow economic recovery.

Brent crude fell 47 cents, or 1%, to settle at US$44.90 a barrel while West Texas Intermediate (WTI) for September delivery ended the session 35 cents, or 0.8% lower, at $42.58 a barrel on the last day of trading. The more active October WTI contract ended down 29 cents, or 0.7%, at $42.82 a barrel.

The Organization of the Petroleum Exporting Countries and its allies, known an OPEC+, said on Wednesday the pace of the oil market recovery appeared to be slower than anticipated with growing risks of a prolonged second wave of the pandemic.

Prices came under renewed pressure after Reuters reported that some OPEC+ members would need to cut output by an extra 2.31 million barrels per day (bpd) to make up for recent oversupply.

Global markets also turned sour as the number of new U.S. claims for unemployment benefits rose back above 1 million last week.

Oil prices have been largely rangebound since mid-June, with Brent trading from $40 to $46 per barrel and WTI between $37 and $43.

"The rebound in global economic activity which explained to some extent the firm oil price during May-June period has stalled... the macro environment for crude oil continues to show weakness," said Georgi Slavov, head of global fundamental research at Marex Spectron.

However, crude exports from Saudi Arabia, the world's largest oil exporter, extended a decline in June to the lowest on record, official data showed.

Wall Street also came under pressure after minutes on Wednesday from the Fed's latest policy meeting showed the labor market's swift rebound in May and June had likely slowed and that policymakers would stick with aggressive stimulus measures for a much longer period.

Despite signs that parts of the economy were still far away from pre-pandemic levels, the benchmark S&P 500 index completed its fastest recovery from a bear market this week, joining the Nasdaq in scaling new peaks.

"With attainment of a record S&P earlier this week, trends still favor higher prices across an array of asset classes and we continue to anticipate fresh multi-month oil price highs with the product markets advancing above such a threshold by next week," Jim Ritterbusch, president of Ritterbusch and Associates, said.

- Reuters
Article type: metered
User Type: anonymous web
User Status:
Campaign ID: 1
Cxense type: free
User access status: 3
Subscribe now to our Premium Plan for an ad-free and unlimited reading experience!

oil price , Opec+ , Brent , WTI , oversupply , jobless data ,

   

Next In Business News

SDP’s new industrial products achieve 100% take-up rate
India’s push for home-grown navigation system jolts smartphone giants
Oil prices fall for a second day on concerns for expected recession
Asian currencies plumb multi-year lows as safe-haven demand lifts dollar
Maxis Awards returns, calling for submission
Garuda Indonesia files for Chapter 15 U.S. bankruptcy procedure - CEO
BNM unveils new measures to strengthen safeguards against financial scams
CIMB commits RM30bil SME financing
Bursa Malaysia enhances sustainability reporting framework with new climate change reporting
PETRONAS: North Malay Basin phase 3 block PM302 achieves first gas production

Others Also Read