Oil steady as virus fears counter positive factory data

Oil pump jacks are seen in McKenzie County, in western North Dakota. Over the past month, Brent crude oil has been trading in a range between $41 and almost $45. (AP/File )
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Updated 04 August 2020

Oil steady as virus fears counter positive factory data

  • Fears over rising COVID-19 cases weigh on market; euro zone manufacturing activity expands modestly

LONDON: Oil prices steadied on Monday as rising COVID-19 cases around the globe and oversupply worries fueled by the prospect of OPEC and its allies winding back output cuts were offset by positive industry data in Europe and Asia.

Brent crude rose 5 cents, or 0.1 percent, to $43.57 a barrel by while US West Texas Intermediate crude gained 6 cents, or 0.1 percent, to $40.33.

Over the past month, Brent has been trading in a range between $41 and almost $45.

“Oil continues to trade in an incredibly rangebound manner,” said Warren Patterson, ING’s head of commodities strategy.

“Speculators appear to be getting more nervous about the demand recovery, with the path much more gradual than market expectations coming into the second half of the year.”

Coronavirus cases have continued to climb in the United States and have reached almost 18 million globally, with more countries imposing new restrictions or extending existing curbs in an effort to control the pandemic. While fuel demand recovers slowly in the face of the resurgence of the virus, investors are also worried about oversupply as the Organization of the Petroleum Exporting Countries (OPEC) and its allies, a group known as OPEC+, prepare to ease oil supply cuts from August.

“Concerns appear to be developing that a rise in OPEC+ production will coincide with uneven recovery in oil demand due to localized setbacks following secondary waves of COVID outbreaks,” said Harry Tchilinguirian, head of commodity research at BNP Paribas.

OPEC+ members have been cutting output since May by 9.7 million barrels per day (bpd). From this month cuts will officially taper to 7.7 million bpd until December.

Russian oil and gas condensate output increased to 9.8 million bpd over Aug. 1-2, from 9.37 million bpd in July, a source familiar with data said on Monday.

Oil prices fell earlier in the session but found some support after a survey showed manufacturing activity across the eurozone expanded last month for the first time since early 2019. 

Positive manufacturing data in Asia also helped to support oil prices.

A Reuters poll on Friday indicated that oil is set for a slow crawl upwards this year as the gradual easing of coronavirus-led restrictions buoys demand, though a second COVID-19 wave could slow the pace of a recovery.


Britain expects ‘very significant’ week for Brexit talks as clock ticks down

Updated 29 November 2020

Britain expects ‘very significant’ week for Brexit talks as clock ticks down

  • Despite missing several self-imposed deadlines, the negotiations have failed to bridge differences on competition policy and the distribution of fishing rights
  • Britain’s transitional EU exit agreement expires on Dec. 31, and Britain says it will not seek any extension

LONDON: Britain and the European Union are heading into a “very significant” week, British foreign minister Dominic Raab said on Sunday, as talks over a trade deal enter their final days with serious differences yet to be resolved.
EU negotiator Michel Barnier told reporters in London that “works continue, even on Sunday” on his way to a negotiating session, as both sides look for a deal to prevent disruption to almost $1 trillion of trade at the end of December.
“This is a very significant week, the last real major week, subject to any further postponement... we’re down to really two basic issues,” Raab told the BBC.
Despite missing several self-imposed deadlines, the negotiations have failed to bridge differences on competition policy and the distribution of fishing rights.
But Britain’s transitional EU exit agreement — during which the bloc’s rules continue to apply — expires on Dec. 31, and Britain says it will not seek any extension. A deal would have to be ratified by both sides, leaving little time for new delay.
“The bottom line is... in the ordinary course of things we need to get a deal done over the next week or maybe another couple of days beyond that,” Raab told Times Radio in a separate interview.
Earlier, he had signalled some progress on the ‘level playing field’ provisions which look to ensure fair competition between Britain and the EU, and said fishing remained the most difficult issue to solve.
Despite accounting for 0.1% of the British economy, fishing rights have become a totemic issue for both sides. Britain has so far rejected EU proposals and remains adamant that as an independent nation it must have full control of its waters.
“The EU have just got to recognize the point of principle here,” Raab told Times Radio.