Oil Declines on Demand Concerns as Market Looks to OPEC Meeting

© Reuters.

(Bloomberg) — Oil slipped in Asia, trading near last week’s three-month lows, as the market braces for reduced consumption after the U.S. summer driving season and traders look to this week’s OPEC meeting.

Futures in New York fell as much as 0.8%, after nudging up 0.1% Friday. The Organization of Petroleum Exporting Countries and its allies will meet Thursday to discuss the state of the market amid a stalling recovery from April’s price rout. The pandemic continues to rage in some parts of the world, forcing prices back below $40 a barrel in September for the first time since June.

There is at least a glimmer of hope that a vaccine isn’t far away, with The University of Oxford and AstraZeneca (NYSE:) Plc saying at the weekend that they have restarted a U.K. trial of an experimental Covid-19 drug after it was halted over concerns about a participant who fell ill.

dropped 6.1% last week to seal its first back-to-back weekly loss since April’s rout, with the end of the summer driving season and concern about OPEC’s production compliance weighing down on prices.

Uncertainty over how much supply OPEC+ is returning to the market adds another wrench in the recovery for oil prices still reeling from the pandemic-driven blow to consumption. While U.S. supplies had grown tighter in past months and producers were expected to restrain production amid a weak financial backdrop, stockpiles rose again last week for the first time since mid-July.

Read: Flagging Asian Demand Sees Oil Sellers Brace for Price Battle

READ  INSIGHT-Disease that killed millions of China's pigs poses global threat

Iraq has cut pricing for all of its crude grades for sale to Asia and the U.S. for October, following similar reductions by Saudi Arabia and other Gulf producers and further signaling that a global demand rebound is faltering.

In Libya, a military commander seeking to oust the country’s United Nations-backed government will let the oil industry reopen after an eight-month blockade that’s all but halted exports, according to U.S. diplomats.

©2020 Bloomberg L.P.

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.



Please enter your comment!
Please enter your name here