TOKYO: Oil prices fell on Friday on concerns that major producers will move ahead with plans to ease their supply cuts even as a spike in Covid-19 cases in Europe and the US is curtailing demand in two of the world’s biggest fuel consuming regions.
Brent crude futures for December dropped 22 cents, or 0.5 per cent, to $42.94 a barrel, while US West Texas Intermediate (WTI) crude futures for November delivery slid 16 cents, or 0.4 per cent, to $40.8 a barrel.
Both benchmarks fell slightly the previous day; however, they are headed for small gains for the week.
A technical committee of the Organization of the Petroleum Exporting Countries (OPEC) and allied oil producers, a group known as OPEC+, ended a meeting on Thursday expressing concerns about rising oil supply as social restrictions to curb the spread of Covid-19 limit fuel usage.
Supply cut reduction
OPEC+ is set to reduce its current supply cuts of 7.7 million barrels per day (bpd) by two million bpd in January even as OPEC Secretary-General Mohammed Barkindo admits fuel demand is looking “anaemic”.
The bearish demand outlook and rising supply from Libya may mean OPEC+ could roll over the existing cuts into next year, OPEC+ sources said on Thursday.
There is an OPEC+ meeting scheduled from 30 November to December 1to Dec. 1 to set policy.