Oil holds on demand concerns and significant OPEC + compliance


A worker sprays a valve with disinfectant in an oil field in Iraq on March 15, 2020. Photo: Essam Al-Sudani – Reuters

NEW YORK (Reuters) – Oil prices held steady on Tuesday, as a heavy commitment to reduce supplies from the OPEC + producer group compensated for worries about demand due to the emerging coronavirus.

Brent crude futures rose 9 cents to settle at $ 45.46 a barrel. And US West Texas Intermediate crude futures settled at $ 42.89 a barrel.

Supporting prices on Tuesday, a technical committee concluded that the proportion of commitment to OPEC + production cuts was between 95% and 97% in July, according to a draft report seen by Reuters on Monday.

In August, the Organization of the Petroleum Exporting Countries (OPEC) and its allies, known as the OPEC + group, began to reduce the agreed production cuts to 7.7 million barrels per day from 9.7 million barrels per day.

OPEC + is due to hold a ministerial committee meeting on Wednesday.

“I expect OPEC + to announce that it demands a firm commitment from all members and is jubilant about the success of the measures so far,” said Bjornar Tonhaugen of Rystad Energy.

Australian company BHB Beltone, mining and oil production, said when announcing its results on Tuesday that it believed “the biggest risks in the present (oil) market have passed,” adding that the pace of gains may be modest given the headwinds raised by the return of supplies.

Prepared by Mahmoud Salama for the Arabic Bulletin


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