On Tuesday, oil prices slipped on the concerns over demand outlook due to the rise in global coronavirus cases. However, the commitment statement from OPEC+ has kept the fall in check.
On 00.27 GMT, Brent crude oil futures edged down by 0.4% or 14 cents to USD39.58/barrel after rising by 2.6% on Monday. Likewise, US WTI also fell by 0.7% or 24 cents to USD36.88/barrel after closing 2.4% higher yesterday.
On Monday, the global coronavirus infections rose to more than 8 million with infections surging in Latin America, while the US and China are dealing with fresh outbreaks.
However, Monday’s statement from the energy minister of the UAE kept the falls in check. He said that the Organization of Petroleum Exporting Countries and its non-member allies (OPEC+)’s laggard countries would improve in committing to the output cut pact. The lacking countries have been asked to make up their commitments with extra cuts later.
This month, OPEC+ has agreed to extend the output curb of 9.7 million bpd through July.
Other than that, another factor putting a stopper in the decline was the fall in US oil rig count as the oil demand collapse prompted US shale producers to cut back on drilling.
According to Baker Hughes, the number of US oil rigs slumped below 200 in the week ended June 12, the lowest since June 2009. On Monday, the US Energy Information Administration (EIA) said that production from seven major US shale formations is likely to drop to close to a two-year low of 7.63 million bpd by July.
