Prominent oil traders are expected to share their views at the upcoming OPEC meeting.
Due to reduced travel activities on the ground and in the air, oil prices have been at historically low levels for the past few months. To stabilize prices, oil producers have been cutting down their supply. However, as some countries are planning to resume travel amidst the ongoing pandemic, there will likely be an increase in the demand for oil. Oil traders are looking to take advantage of this opportunity.
Today, Brent crude oil prices fell by 25 cents to $42.99 per barrel, while West Texas Intermediate crude prices also dropped to $40.34 per barrel, down by 21 cents. The recent spike in coronavirus cases in the USA has led to stricter restrictions on both domestic and international travel, significantly impacting the oil market. Given that the US is the world’s largest consumer of commercial oil, its demand has a significant influence on the market.
Interestingly, there seems to be a slight positive shift in the oil market. The International Energy Agency recently made a minor upward adjustment to its oil forecasts for the rest of the year, indicating some signs of improvement. In light of this, OPEC is convening a meeting in the coming days to deliberate on their future actions. While additional cuts are being considered, some oil traders, as per CNBC, are advocating for a reduction in the cuts.
“The planned easing of OPEC+ production cuts next month… and a potential rebound in U.S. production could add pressure on the supply side of the equation,” mentioned Stephen Innes, the chief global markets strategist at AxiCorp.
The OPEC meeting is scheduled to commence on Tuesday and extend until Wednesday.
