Wednesday, October 20, 2021

Oil Holds Below $73 on Demand Concerns Ahead of OPEC+ Meeting

Must read

imageCommodities15 minutes ago (Jun 28, 2021 08:54PM ET)

(C) Reuters. Oil Holds Below $73 on Demand Concerns Ahead of OPEC+ Meeting

(Bloomberg) — Oil held losses below $73 a barrel as a coronavirus resurgence raised concerns about the demand recovery ahead of an OPEC+ meeting this week that’s expected to lead to increased output from the alliance.

Futures in New York edged lower after declining 1.5% on Monday. The more infectious delta variant of the virus has resulted in a spike in U.K. cases and led to renewed restrictions and lockdowns in other regions. OPEC+ may boost August output by 500,000-to-1 million barrels a day when the group meets on Thursday, according to RBC Capital Markets.

Oil is still up around 10% this month as a rebound from the Covid-19 pandemic accelerated in key regions including the U.S. and China, underpinning a surge in fuel consumption and tightening supply worldwide. Futures and swaps in the world’s leading pricing locations are in a bullish backwardation structure, signaling more barrels are needed for the physical market.

The U.K. on Monday reported the most new Covid-19 cases since January, and Hong Kong, Spain and Portugal all imposed new restrictions to visitors from the nation. Authorities are also racing to contain outbreaks in Australia. The virus flare-up may lead to export-focused refiners in Asia trimming processing rates.

See also: Oil Majors Cutting Investment on ESG Push May Send Crude to $100

OPEC+ expects that global oil markets will remain in deficit this year if it keeps output steady, according to data that technical experts will review on Tuesday ahead of the coalition’s main meeting. Estimates to be presented to the Joint Technical Committee show that demand is poised to exceed supply by 1.7 million barrels a day in August, figures seen by Bloomberg show.

(C)2021 Bloomberg L.P.

Oil Holds Below $73 on Demand Concerns Ahead of OPEC+ Meeting

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.

Latest article