Oil slipped in early Asian trade on Monday 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.
FILE PHOTO: An oil pump jack pumps oil in a field near Calgary, Alberta, July 21, 2014. Pump jacks are used to pump crude oil out of the ground after an oil well has been drilled. REUTERS/Todd Korol/File PhotoBrent crude LCOc1 fell 27 cents to $42.97 a barrel by 0114 GMT while U.S. West Texas Intermediate crude CLc1 was at $40.27 a barrel, down 28 cents.
Oil was little changed last week as a resurgence of coronavirus cases prompted several U.S. states to impose tighter travel restrictions that could dampen oil demand recovery at the world’s largest consumer.
However, prices rose more than 2% 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 U.S. 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 Corp accused the United Arab Emirates of instructing the eastern forces in Libya’s civil war to reimpose the blockade.