Oil holds near $32 ahead of OPEC-led talks on output cuts

Commodities & Futures
© Reuters. FILE PHOTO: A maze of crude oil pipes and valves at the Strategic Petroleum Reserve in Freeport, Texas © Reuters. FILE PHOTO: A maze of crude oil pipes and valves at the Strategic Petroleum Reserve in Freeport, Texas

By Alex Lawler

LONDON (Reuters) – Oil steadied near $ 32 a barrel on Wednesday, supported by hopes that a meeting between OPEC members and allied producers on Thursday will trigger output cuts to shore up prices that have collapsed due to the coronavirus pandemic.

Thursday’s videoconference meeting between the Organization of the Petroleum Exporting Countries (OPEC) and allies including Russia is expected to be more successful than their gathering in March, which ended in a failure to extend supply cuts and a price war between Saudi Arabia and Russia.

“The coming extraordinary producing-countries meeting is the only hope on the horizon for the market,” said Bjornar Tonhaugen of Rystad Energy.

“Nobody wants to go short ahead of what could be a ‘positive surprise’ by OPEC++.”

Brent crude () was down 9 cents, or 0.3%, at $ 31.78 by 0837 GMT after falling 3.6% on Tuesday. U.S. West Texas Intermediate (WTI) crude () rose 94 cents to $ 24.87.

Crude has collapsed in 2020 because of a slide in demand due to the coronavirus outbreak and excess supply. Brent dropped to $ 21.65, its lowest since 2002, on March 30.

While OPEC sources have said a deal to cut production is conditional on the participation of the United States, doubts remain as to whether Washington will contribute.

The U.S. Department of Energy said on Tuesday U.S. output was already declining, without government action.

U.S. crude production is expected to slump by 470,000 bpd and and demand is set to drop by about 1.3 million bpd in 2020, the U.S. Energy Information Administration (EIA) said on Tuesday.

Before the OPEC and other producers’ meeting, the latest round of U.S. oil inventory data will be in focus on Wednesday.

In a sign of excess supply, the American Petroleum Institute, an industry group, said U.S. crude inventories jumped by 11.9 million barrels. The government’s supply report is due at 1430 GMT.

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.

Let’s block ads! (Why?)

Commodities & Futures News

Leave a Reply

Your email address will not be published. Required fields are marked *