MELBOURNE (Reuters) – Oil prices plummeted in trade early Wednesday, extending several days of losses, amid uncertainty over what supply-side countries will push back to the market at this week’s meeting while coronavirus pandemic persists.
U.S. West Texas Intermediate (WTI) crude futures fell 18 cents, or 0.3%, to $ 59.57 a barrel by 0122 GMT, down 6% from Feb. 25, when they hit their highest level since May 2019.
Brent crude times fell 7 cents, or 0.1%, to $ 62.63 per barrel, down 7% from hitting a 13-month high last week.
The Organization of the Petroleum Exporting Countries (OPEC) and its allies, known as OPEC +, are expected to meet on Thursday at a time when they are generally positive about the outlook for the oil market compared to a year ago. when they lost supply to raise prices.
OPEC + sources said last week that a yield increase of 500,000 barrels per day (bpd) seemed possible without raising investments. Saudi Arabia’s 1 million bpd voluntary cut is set to end in April, but it is unclear whether it will restore all that supply immediately.
“The days of GDP and oil demand figures appear to be in the red due to the pandemic behind us,” OPEC Secretary General Mohammad Barkindo said Tuesday, speaking ahead of a meeting of the OPEC Joint Technical Committee. + (JTC).
However, a JTC document that saw Reuters cite continued uncertainty in physical markets and the risks of the coronavirus pandemic following COVID-19 mutations.
“The question the group has to answer this week is whether the return demand is strong enough to sustain an increase in yield,” ANZ analysts said in a note.
Reaffirming concerns about oversupply, the American Petroleum Institute industry group reported that U.S. crude stock rose 7.4 million barrels per week to Feb. 26, compared to analysts’ estimates for a pullback of 928,000 barrels. [API/S]
“Unexpected crude investments will pick up at a time of worry for oil bulls,” said Stephen Innes, Axi’s global market strategist.
Reciting with Sonali Paul; Edited by Kenneth Maxwell