On Monday, oil prices fell ahead of the OPEC+ meeting this week to plan the ease of oil output cut pact. Prices were also affected by the global developments on inventories.
Crude oil futures in New York edged down by 1% after on Friday they rose by 2.4%. WTI for August delivery slipped by 35 cents to USD40.20/barrel on the New York Mercantile Exchange at 8.18 AM GMT+10.
Brent for September slumped by 37 cents to USD42.87/barrel on the ICE Futures Europe exchange, after rising by 89 cents on Friday close at USD43.24/barrel.
The global oil supplies are impacted by the market’s expectations of the meeting of the Organization of Petroleum Exporting Countries and its non-member oil producer allies (OPEC+). The minister-level monitoring committee online meeting will be held on July 15 and the market is expecting the group to soon start easing the output curb pact.
According to two sources, Russian top oil companies are ready to boost production starting in August. Iranian Oil Minister Bijan Zanganeh said that Iran would expand its oil production capacity ahead of the end of the OPEC+ output cut pact to get back its share of the global crude oil market.
In Libya, the country’s oil market is under uncertainties after the military stated that it would resume the blockade of ports and energy fields. The statement came out just less than a day after the state energy company said exports could continue.
Meanwhile, according to data from Baker Hughes, the US oil rigs count on the week ended July 10 dropped by 4 to 181, the lowest level since June 2009. Shale explorers idled more rigs as the oil prices rebound to above USD40/barrel were deemed unsufficient to boost output.
Looking ahead, the International Energy Agency (IEA) warned that the demand for fuels could be dampened by a resurgence of the coronavirus pandemic, albeit the possibility to also rebound sharply in the upcoming three months as economic activities all over the world resume.
