Oil steady ahead of OPEC meeting despite surge in COVID-19 infections

By Scott DiSavino NEW YORK (Reuters) - Oil prices were little changed on Monday as the market waits for direction from an OPEC meeting later this week that is expected to recommend an increase in output. That lack of price movement came despite concerns demand could take a hit if some governments reverse lockdowns after global coronavirus cases rose by a record daily amount. The World Health Organization reported a record daily increase in global coronavirus cases on Sunday, with the total up by more than 230,000

Reuters July 14, 2020 00:05:56 IST
Oil steady ahead of OPEC meeting despite surge in COVID-19 infections

Oil steady ahead of OPEC meeting despite surge in COVID19 infections

By Scott DiSavino

NEW YORK (Reuters) - Oil prices were little changed on Monday as the market waits for direction from an OPEC meeting later this week that is expected to recommend an increase in output.

That lack of price movement came despite concerns demand could take a hit if some governments reverse lockdowns after global coronavirus cases rose by a record daily amount.

The World Health Organization reported a record daily increase in global coronavirus cases on Sunday, with the total up by more than 230,000.

In the United States, infections surged over the weekend as Florida reported an increase of more than 15,000 new cases in 24 hours, a record for any state.

Brent futures fell 1 cent to $43.23 a barrel by 1:14 p.m. EDT (1714 GMT), while U.S. West Texas Intermediate (WTI) crude rose 5 cents, or 0.1%, to $40.60.

Oil traders remained on edge as the Joint Ministerial Monitoring Committee (JMMC) of the Organization of the Petroleum Exporting Countries (OPEC) prepares to meet on Tuesday and Wednesday to recommend levels for future supply cuts.

OPEC and allies including Russia, a group known as OPEC+, are expected to ease their production cuts to 7.7 million barrels per day (bpd) after a recovery in global oil demand.

"That seems a quite risky option, with the safer being a one month extension ... It may be time to brace for volatility once again," said Edward Moya, senior market analyst at OANDA in New York, noting "The (OPEC+) cut was crucial to stabilizing oil prices."

OPEC+ cut output by a record 9.7 million bpd for May, June and July.

A gradual rise in oil demand as countries ease coronavirus lockdowns and record supply cuts by OPEC+ are bringing the oil market closer to balance, OPEC Secretary General Mohammad Barkindo said on Monday.

Graphic: Demand supply balance - https://fingfx.thomsonreuters.com/gfx/ce/oakvealagvr/IEA%202.JPG

Libya, meanwhile, re-imposed force majeure on all oil exports on Sunday because of a renewed blockade by eastern forces. The move comes only two days after Libya exported its first crude cargo in six months.

Graphic: Libya oil production - https://fingfx.thomsonreuters.com/gfx/editorcharts/rlgpdlggepo/eikon.png

(Additional reporting by Bozorgmehr Sharafedin in London and Florence Tan in Singapore; Editing by Marguerita Choy and Chizu Nomiyama)

This story has not been edited by Firstpost staff and is generated by auto-feed.

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