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Oil prices soar as producers restrain supply

by Bunkerist
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Oil prices are on their way to a third consecutive week of increase on Friday. Oil has soared amid concerns about major producers rein in supply, the new coronavirus outbreak and economic recovery.

West Texas Intermediate (WTI) crude oil CLc1 futures rose 13 cents, or 0.3%, to $42.95 per barrel at 0505 GMT, on track for a 2% rise for the week.

Brent crude oil LCOc1 futures were up 17 cents, or 0.4%, at $45.07 per barrel, heading for a 0.5% rise for the week.

Both criteria fell around 1% on Thursday due to economic concerns after weekly US jobless claims came in higher than expected.

An internal report cited by the Organization of Petroleum Exporting Countries and its allies showed that the group known as OPEC +, as sounded after the OPEC + meeting on Wednesday, is focused on ensuring that members who produce contrary to their commitments cut their output.

The United Arab Emirates, which made additional voluntary cuts in June, is said to have produced around 50,000 barrels of excess production in the May-July period, and Iraq and Nigeria are the least compatible among OPEC members.

The report also pointed to demand risks and showed that OPEC + expects oil demand to drop to 9.1 million barrels in 2020, to be more than 100,000 barrels from its previous forecast. Concerns remain that demand could drop by 11.2 million barrels in 2020 if a second long-term infection wave hits China, India, Europe and the United States in the second half of the year.

Expectations are that demand may continue to recover, albeit with ups and downs.

Brent is likely to hover close to $ 45 a barrel, but the market is not expected to rise much in the near term.

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