Oil falls as demand worries re-emerge

Oil prices fell on Thursday as U.S. producers in the Gulf of Mexico prepared to resume output following Hurricane Sally, and on concerns about that the coronavirus pandemic was showing few signs of slowing.

Brent crude fell 15 cents, or 0.4%, to $42.07 a barrel at 0832 GMT, after climbing 4.2% on Wednesday. U.S. West Texas Intermediate (WTI) crude was down 17 cents, or 0.4%, at $39.99 a barrel, after jumping 4.9% on Wednesday.

U.S. energy companies were starting to return crews to offshore oil platforms in the Gulf of Mexico after Hurricane Sally halted operations for five days, shutting down output of nearly 500,000 barrels per day (bpd).

An OPEC+ technical panel warned that a rise in coronavirus cases in some countries may curb oil demand despite signs of economic recovery and initial indications of a decline in oil stocks, according to an internal document seen by Reuters. Global coronavirus cases are expected to pass 30 million on Thursday, according to a Reuters tally.

Later on Thursday, OPEC and allies, led by Russia, are scheduled to hold an online meeting to discuss compliance with their agreed output cuts and demand trends amid falling oil prices and a faltering economic recovery outlook. “Mission is far from accomplished by OPEC+ and the need for deeper cuts or reigning in sub-compliers to avoid global stock builds returning is overarching,” said Rystad Energy’s head of oil markets Bjornar Tonhaugen.

Oil falls as demand worries re-emerge, crews return to U.S. Gulf rigs, Reuters, Sep 17