Oil inches higher despite demand fears

Singapore — Global oil prices edged up on Friday, but are on track for a second monthly fall on growing concerns that the rise in Covid-19 cases in Europe and the US could hurt fuel consumption.

Brent crude edged up 15c to $37.80 a barrel by 4.51am GMT after touching a five-month low in the previous session while US West Texas Intermediate (WTI) crude was at $36.27 a barrel, up 10c.

“It looks like a dead cat bounce at this stage,” said Jeffrey Halley, senior market analyst, Asia Pacific, Oanda in Singapore.

“With a European slowdown jeopardising global consumption and the return of Libyan production, the onus must now fall on Opec+ to reconsider their 2-million barrel per day (bpd) production increases in January.”

He added that oil prices are unlikely to sustain any rally in this environment short of a statement from Opec+.

Opec and their allies including Russia, a group known as Opec+, are expected to raise their output by 2-million bpd in January as part of their production agreement.

However, top producers Saudi Arabia and Russia are in favour of maintaining the group’s output reduction of about 7.7-million bpd into next year as renewed lockdowns in Europe are threatening to cool demand again.

Reuters