Oil Prices Edge Higher ahead of OPEC+ Meeting
Oil was up Tuesday morning in Asia, bouncing back from the previous session’s drops. However, investors remained concerned about fuel demand recovery as the number of COVID-19 cases in India, the world’s third-biggest crude importer, continues to increase.
While U.S. WTI gained 36 cents, or 0.6%, to $62.27, having declined by 0.4% the previous session
“There are clearly some concerns around the demand outlook, particularly over how the COVID-19 situation is developing in India,” ING Economics analysts.
OPEC+ Meeting on Oil Supply
India’s woes come as the Organization of the Petroleum Exporting Countries (OPEC) and allies led by Russia, a group known as OPEC+, discuss policy on production at a meeting today.
OPEC and its allies projected a strong recovery in global oil demand this year, but the outlook was clouded by a raging virus outbreak in India just days before the group’s next meeting.
According to delegates who attended the panel on Monday, a committee of technical experts from the group forecast that world oil consumption will rebound by 6 million barrels a day this year. Most of the fuel inventory glut accumulated during the pandemic will have dissipated by the end of this quarter, they estimated.
However, the OPEC+ has raised concerns about the surging COVID-19 cases in India, Brazil and Japan.
“Traders are cautious ahead of the OPEC+ Ministerial meeting” this week, the OPEC technical committee acknowledged potential demand concerns about demand destruction brought about by the worsening pandemic in India.” Avtar Sandu, senior manager commodities, Phillip Futures in Singapore.
The Indian government has taken action, ordering its armed forces to deal with COVID-19 as the number of cases topped 17.3 million as of April 27, according to Johns Hopkins University data.
Analyst are wondering whether OPEC+ feels that the situation is bad enough to alter its planned production easing from 1 May. However, they stated they still expect that the group will announce no changes to its plan when they meet tomorrow.