Oil falls as possible OPEC+ supply boost, COVID-19 spike weigh on sentiment

Friday,   16-Oct-2020   08:40 AM (IST)

Oil prices fell on Friday on concerns that major producers will move ahead with plans to ease their supply cuts even as a spike in COVID-19 cases in Europe and the United States is curtailing demand in two of the world's biggest fuel consuming regions. Brent crude futures for December (LCOc1) dropped 22 cents, or 0.5%, to $42.94 a barrel by 0154 GMT, while U.S. West Texas Intermediate (WTI) crude futures for November delivery (CLc1) slid 16 cents, or 0.4%, to $40.8 a barrel. Both benchmarks fell slightly the previous day; however, they are headed for small gains for the week. A technical committee of the Organization of the Petroleum Exporting Countries (OPEC) and allied oil producers, a group know as OPEC+, ended a meeting on Thursday expressing concerns about rising oil supply as social restrictions to curb the spread of COVID-19 limit fuel usage. OPEC+ is set to reduce its current supply cuts of 7.7 million barrels per day (bpd) by 2 million bpd in January even as OPEC Secretary General Mohammed Barkindo admits fuel demand is looking "anaemic." The bearish demand outlook and rising supply from Libya may mean OPEC+ could roll over the existing cuts into next year, OPEC+ sources said on Thursday. There is an OPEC+ meeting scheduled for Nov. 30 to Dec. 1 to set policy. In Europe, some countries were reviving curfews and lockdowns to fight a surge in new coronavirus cases, with Britain imposing tougher COVID-19 restrictions in London on Friday. Pandemic cases have surged in the U.S. Midwest and beyond, with new infections and hospitalizations rising to record levels in an ominous sign of a nationwide resurgence as temperatures get colder.