Oil prices fell on Monday when traders made a profit, and the Organization of the Petroleum Exporting Countries (OPEC) is considering meeting this week to discuss whether to extend record production cuts beyond the end of June.. Brent LCOc1 crude fell 15 cents, or 0.4%, to $ 37.69 a barrel on the first day of contract trading, with August the first month.
West Texas Intermediate (WTI) CLc1 crude for July delivery was at $ 35.36 a barrel, down 13 cents, or 0.4%, at 0419 GMT. The drop in prices comes after the first month’s Brent and WTI prices registered their highest monthly earnings in years in May. The gains were fueled by OPEC crude production that fell to its lowest level in two decades, with demand expected to rebound as more nations emerge from the coronavirus blockades. “The focus is very much on OPEC +“OCBC economist Howie Lee said, referring to OPEC and its allies, including Russia. OPEC + agreed in April to cut output by an unprecedented 9.7 million barrels per day (bpd) in May and June, after the coronavirus pandemic wiped out demand. “We could see a cautious decline in (crude) prices given that the prices of derivative products have not been brought up to date … but if OPEC + reaches a three-month extension, there is a possibility that prices will reach the level $ 40, ”Lee said. Still, tensions between the United States and China weighed on global financial markets, while traders are also on the lookout for the weekend unrest that has engulfed major cities in the United States.
Saudi Arabia proposes to extend record cuts from May and June to the end of the year, but has yet to gain Russia’s supportsources have told Reuters.
Algeria, currently holding the OPEC presidency, has proposed that an OPEC + meeting scheduled for June 9-10 be brought forward to facilitate the sale of oil to countries such as Saudi Arabia, Iraq and Kuwait. Russia has no objection to the meeting being brought forward to June 4. “It has been widely interpreted to be likely to lead to an extension of current production cuts,” said CMC Markets chief market strategist Michael McCarthy. “Oil prices have slightly decreased in our session, but are still at high levels. I suspect that it is the key driver of Friday night pricing and should keep prices reasonably well supported today. ”
In the meantime, North American supply is also fallingAs Baker Hughes Co. data showed that the U.S. and Canadian oil and gas rig count fell to a record low for the week through May 29.