Oil prices offered a mixed market snapshot on Monday, with Brent crude edging higher, supported by tighter supplies, while US benchmark WTI futures decreased with concern that a spike in coronavirus cases might curb oil demand in the US. Brent crude LCOc1 rose 18 cents, or 0.4 per cent, to $42.98 a barrel of 0252 GMT after last week’s 4.3 per cent gain, while the U.S. West Texas Intermediate crude CLc1 was down from its previous settlement Thursday at $40.42, down 23 cents, or 0.6 per cent. On Friday, U.S. markets were closed to mark the 4th of July holiday celebrations.
“There will be some kind of decline in demand if cases were to increase as people will stay at home,” said Howie Lee, an economist at Singapore’s OCBC bank. “The pace of US demand recovery will not be as steep as expected.” “We will get a better idea of what impact tighter restrictions in several states have had on gasoline demand with the EIA (Energy Information Administration) report this week,” ING said in a note.
For a third month in July, OPEC and allies including Russia, collectively known as OPEC+, pledged to slash production by a record 9.7 million barrels per day ( bpd). After July the cuts are due until December to taper to 7.7 million bpd. US manufacturing, the largest in the world, is also falling. For a ninth week, the number of US oil and natural gas platforms operating dropped to an all-time low, although the declines accelerated as rising oil prices prompted some producers to resume drilling.