(Bloomberg) Oil extended declines as OPEC+ warned of a precarious outlook for the market while a resurgent virus hits consumption. Saudi Arabia’s Energy Minister Prince Abdulaziz bin Salman, speaking at the coalition’s committee meeting on Monday, called on the group to be proactive in the face of uncertain demand. The comments are strengthening expectations that OPEC and its allies will delay plans to restore 2 million barrels of halted output at the start of next year.
“The main focus is going to be: look, let’s delay the taper, and the conversations are going to be around for how long,” Amrita Sen, chief oil analyst at consultant Energy Aspects Ltd., said in a Bloomberg television interview.
While demand from China is robust, prices are struggling to push higher as coronavirus cases rise and Libyan supplies recover after a lengthy halt. Meanwhile, more U.S. stimulus remains elusive as time draws short to reach an agreement on a bill that could pass by the election.
Brent for December settlement declined 12 cents to $42.50 a barrel on the ICE Futures Europe exchange as of 10:19 a.m. London time, after losing 0.7% in the previous session
Brent’s prompt timespread was 38 cents a barrel in contango, compared with 51 cents at the start of the month, signaling that concerns about oversupply have eased
West Texas Intermediate for November delivery, which expires Tuesday, was down 10 cents at $40.73 a barrel on the New York Mercantile Exchange
The more active December contract fell 5 cents to $41.01
While the demand recovery has slowed due to multiple outbreaks of the virus, it hasn’t stopped altogether, Russian Energy Minister Alexander Novak said in his opening remarks to OPEC+’s Joint Ministerial Monitoring Committee on Monday. Novak’s comments are the best indicator that the group is likely to delay plans to taper output cuts, according to UBS Group AG.
Other oil-market news:
Concho Resources Inc., an early explorer of the Permian Basin’s once-coveted oil riches that was worth $32 billion just two years ago, is being sold for $9.7 billion in stock.
Low-sulfur fuel oil, mainly used for shipping, has emerged as a bright spot in the refining complex as supplies tighten, with demand for the fuel likely to remain strong at least through the end of the year, according to FGE and IHS Markit.
Crude prices will start to recover in 2022, after the coronavirus crisis abates, Iraqi Oil Minister Ihsan Abdul Jabbar said in an online conference.
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