Oil is set for a third monthly advance in New York before OPEC+ starts returning supply to the market after historic cuts, with the pandemic still raging unabated across many major economies.
Deep production curbs by OPEC and its allies have helped oil rebound from its plunge below zero in April, but it’s a precarious time to be adding more supply to the market with the coronavirus spreading rapidly through some American states, while staging a comeback in Asia. Futures slid 3.3% on Thursday after data showed the U.S. economy suffered its sharpest downturn since at least the 1940s in the second quarter, highlighting the impact of the outbreak.
Oil’s rebound has stalled near $40 a barrel with rising infections raising doubts about a swift and sustained recovery in consumption. Saudi Arabia and other top producers from the Middle East are coming under heavy pressure to cut the price of their crude, while Royal Dutch Shell Plc Chief Executive Officer Ben van Beurden predicted demand may not see a full recovery until next year.
Source: Bloomberg
