Oil prices plummeted on Monday, the first day of 2021 trading, ahead of a meeting of OPEC and related representatives to discuss production levels for February for fear that first-half demand would enter the market as is the pandemic.
Brent crude for March was at $ 51.76 per barrel, down 4 cents or 0.08%, before 0038 GMT while the US West Texas intermediate crude for February fell 9 cents, or 0.2%, to $ 48.43 per barrel .
Mohammad Barkindo, Secretary General of the Organization of the Petroleum Exporting Countries (OPEC), said Sunday that while crude demand is expected to rise 5.9 million barrels per day (bpd) to 95.9 million bpd this year, the group is ‘see plenty of demand risks down in the first half of 2021.
“We are just beginning to emerge from a year of deep investment cuts, massive job losses and the worst destruction of crude oil demand,” he said.
Prices to the end of 2020 fell about 20% below the 2019 average, still recovering from the impact of global economic lockout measures put in place in the COVID-19 fight that reduced fuel demand, even as prime ministers agreed world producers higher yield cuts during the year.
OPEC and allied representatives including Russia, an organization called OPEC +, decided at a meeting last month to raise production by 500,000 barrels per day in January, expecting an increase in demand, and they agreed to meet monthly to review results.
“We believe the product group chose to make any further increase for February with Covid-19 issues continuing to escalate and vaccine delivery slower than expected,” Helima Croft told RBC Capital.
In the United States, crude oil production remained under pressure from weak prices and tight demand, down more than 2 million barrels per day (bpd) in October from earlier this year, a government report on January 1 showed.