SINGAPORE: Oil slipped in early Asian trade on Monday (Jul 13) as traders eyed an OPEC technical meeting this week which is expected to recommend an easing in supply cuts that have been propping up crude prices.
Brent crude fell 27 cents to US$42.97 a barrel by 0114 GMT while US West Texas Intermediate crude was at US$40.27 a barrel, down 28 cents.
Oil was little changed last week as a resurgence of coronavirus cases prompted several US states to impose tighter travel restrictions that could dampen oil demand recovery at the world’s largest consumer.
However, prices rose more than 2 per cent on Friday after an upward revision by the International Energy Agency in its 2020 oil demand by 400,000 barrels per day.
Oil prices have recovered sharply from multi-decade lows in April after the Organization of the Petroleum Exporting Countries and allies including Russia, a group known as OPEC+, cut output by a record 9.7 million barrels per day for three months since May.
OPEC’s Joint Ministerial Monitoring Committee (JMMC) will meet on Tuesday and Wednesday to recommend the next level of cuts.
OPEC and Russia were expected to ease their supply cuts as global oil demand has recovered and prices have bounced back.
“The planned easing of OPEC+ production cuts next month … and a potential rebound in US production could add pressure on the supply side of the equation,” Stephen Innes, chief global markets strategist at AxiCorp said in a note.
Libya exported its first crude cargo in six months on Friday after a blockade by eastern forces, but then re-imposed force majeure on all oil exports on Sunday.
Its National Oil accused the United Arab Emirates of instructing the eastern forces in Libya’s civil war to reimpose the blockade.