Oil. Picture: REUTERS
Oil. Picture: REUTERS

London — Oil prices fell on Thursday as US producers in the Gulf of Mexico prepared to resume output following Hurricane Sally, and on concerns about that the coronavirus pandemic was showing few signs of slowing.

Brent crude fell 15 US cents, or 0.4%, to $42.07 a barrel at 8.32am GMT, after climbing 4.2% on Wednesday.

US West Texas Intermediate (WTI) crude was down 17c, or 0.4%, at $39.99 a barrel, after jumping 4.9% on Wednesday.

US energy companies were starting to return crews to offshore oil platforms in the Gulf of Mexico after Hurricane Sally halted operations for five days, shutting down output of nearly 500,000 barrels per day (bpd).

“As producers prepare to resume production, oil prices are retreating from yesterday’s price spike,” said oil broker PVM's Tamas Varga.

An Opec+ technical panel warned that a rise in coronavirus cases in some countries may curb oil demand despite signs of economic recovery and initial indications of a decline in oil stocks, according to an internal document seen by Reuters.

Global coronavirus cases are expected to pass 30-million on Thursday, according to a Reuters tally.

Later on Thursday, Opec and allies, led by Russia, are scheduled to hold an online meeting to discuss compliance with their agreed output cuts and demand trends amid falling oil prices and a faltering economic recovery outlook.

“Mission is far from accomplished by Opec+ and the need for deeper cuts or reining in sub-compliers to avoid global stock builds returning is overarching,” said Rystad Energy’s head of oil markets Bjornar Tonhaugen.

“The market is fully aware of the strenuous situation in the short term, hence sending prices a bit down today,” he added.

Reuters

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