Oil Prices Decline Further, Investors Focus on OPEC+ Meeting
Oil prices fell on Tuesday as shipping traffic resumed through the Suez Canal after days on hold. Investors focus has switched to an OPEC+ meeting this week where the extension of supply curbs may be on the table amid new coronavirus pandemic lockdowns.
U.S. oil was down 1 cent at $61.55 a barrel, having fallen 1% in the previous session.
Ships were moving through the Suez Canal again on Tuesday after tugs refloated the giant Ever Given container carrier, which had been blocking a narrow section of the passage for almost a week, causing a huge build-up of vessels around the waterway.
OPEC+ Meeting on Oil Supply
The market is now anticipating a meeting of the Organization of the Petroleum Exporting Countries (OPEC) and allies, including Russia in Vienna, collectively known as OPEC+, set for Thursday.
During the meeting, OPEC+ is expected to discuss whether to keep in place curbs on output that have kept millions of barrels a day off the market to support prices, a strategy that has largely worked in recent months.
On Monday, Saudi Arabia said it is prepared to accept an extension of the production cuts through June and is also ready to prolong voluntary unilateral curbs amid the latest wave of coronavirus lockdowns.
“Market expectations for no change to output are largely priced in. The revival of heavy coronavirus caseloads in Europe has put a brake on oil’s resurgence”. Howie Lee, Economist at OCBC Bank, Singapore.
More than 127.43 million people have been reported to be infected by the third wave of COVID-19 globally, with the death toll approaching 3 million
In Europe, rising numbers in the third wave of infections are alarming authorities, with France’s Finance Minister Bruno Le Maire saying all options are on the table to protect the public.