Market Overview

Oil dips on surge in COVID-19 infections

Oil prices dropped on Monday on big spikes in COVID-19 infections over the weekend in the United States and elsewhere while traders await an OPEC technical meeting expected to recommend an easing of supply cuts. Brent crude LCOc1 fell 65 cents, or 1.5%, to $42.59 a barrel by 0848 GMT, though prices have been hovering around $42 for a couple of weeks. U.S. crude CLc1 was down 75 cents, or 1.9%, at $39.80.

U.S. COVID-19 infections surged over the weekend as Florida reported an increase of more than 15,000 new cases in 24 hours, a record for any state. Oil traders also remained on edge as the Joint Ministerial Monitoring Committee (JMMC) of the Organization of the Petroleum Exporting Countries (OPEC) prepares to meet on Tuesday and Wednesday to recommend levels for future supply cuts.

OPEC and allies including Russia, a group known as OPEC+, are expected to ease their production cuts to 7.7 million barrels per day (bpd) after a recovery in global oil demand. OPEC+ cut output by a record 9.7 million bpd for May, June and July. Libya, meanwhile, re-imposed force majeure on all oil exports on Sunday because of a renewed blockade by eastern forces. The move comes only two days after Libya exported its first crude cargo in six months. Rising tension between the United States and China over the COVID-19 pandemic and other issues also pressured prices.

Oil dips on surge in COVID-19 infections, Reuters, Jul 13

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