On Tuesday, oil prices stepped back due to the bleaker outlook on global demand, but losses were cushioned by the expectations on OPEC+ meeting on Thursday.
By 01.02 GMT, Brent crude oil futures slipped by 0.1% or 3 cents to USD39.58/barrel, shedding the earlier gains. US WTI also edged down by 0.1% or 2 cents to USD37.24/barrel.
Sentiment on demand grew as the Organization of Petroleum Exporting Countries (OPEC) downgraded its oil demand forecast on Monday, while BP commented that oil demand might have already peaked in 2019.
Further weighing the outlook is the possibility of output coming from Libya as Commander Khalifa Haftar has committed to stop the months-long oil facilities blockade.
However, the prices slump was still cushioned by the market’s expectation on the meeting of OPEC and allies (OPEC+) joint ministerial monitoring committee (JMMC) on Thursday. However, many analysts estimated that there would be no further output cuts to be made, even when Brent prices have fallen to lower than USD40/barrel recently.
Another factor providing some support to oil prices was the rising US stocks on Monday, affected by the news related to the development of a coronavirus vaccine in the US.
The concerns over energy supply disruption in the US due to the upcoming Hurricane Sally to the US Gulf Coast also helped buoyed prices. Sally would be the second significant hurricane to shutter oil and gas activity in the past month.
