Oil falls as crews return to US Gulf rigs
- US oil producers restart operations after hurricane.
- Concerns about weak fuel demand back in focus.
- OPEC+ online meeting in focus.
- US data likely to show high levels of jobless claims.
LONDON: Oil prices fell on Thursday as US producers in the Gulf of Mexico prepared to resume output following Hurricane Sally, and on concerns about the slow recovery from the economic impact of the coronavirus pandemic.
Brent crude was down 22 cents, or 0.5%, to $42.00 a barrel at 1219 GMT, and US West Texas Intermediate (WTI) crude fell 28 cents, or 0.7%, to $39.88 a barrel.
Both contracts rose more than 4% on Wednesday.
US energy companies were starting to return crews to offshore oil platforms in the Gulf of Mexico after Hurricane Sally halted operations for five days, shutting down output of nearly 500,000 barrels per day (bpd).
"As producers prepare to resume production, oil prices are retreating from yesterday's price spike," said oil broker PVM's Tamas Varga.
An OPEC+ technical panel warned that a rise in coronavirus cases in some countries may curb oil demand despite signs of economic recovery and initial indications of a decline in oil stocks, according to an internal document seen by Reuters.
Global coronavirus cases are expected to pass 30 million on Thursday, according to a Reuters tally.
Later on Thursday, OPEC and its allies led by Russia, are holding an online meeting to discuss compliance with their agreed output cuts and demand trends amid falling oil prices and a faltering economic recovery outlook.
"Mission is far from accomplished by OPEC+ and the need for deeper cuts or reining in sub-compliers to avoid global stock builds returning is overarching," said Rystad Energy's head of oil markets Bjornar Tonhaugen.
"The market is fully aware of the strenuous situation in the short term, hence sending prices a bit down today," he added.
Prices were also under pressure from the slow economic recovery from the pandemic.
The US Labor Department's weekly report, due at 8:30 a.m. ET, is expected to show about 850,000 Americans filed for unemployment benefits in the week ended Sept. 12, suggesting the labour market's recovery from the COVID-19 was stalling.
Comments
Comments are closed.