Reuters. File photo: The sun breaks behind the chimney of the Grand Pitts oil refinery in the southeast of Paris.
By Florence Tan
SINGAPORE (Reuters) – Oil prices rose on Monday in anticipation of OPEC and its allied producers cutting output to current levels at a one-day meeting in February as the coronavirus epidemic worries about boosting demand in the first half.
For March, it was ૨ 484.44 a barrel, up 627 cents or 1.3%, to 0348 GMT. West Texas Intermediate crude rose 55 cents, or 1.1%, to 49 49.07 a barrel in February.
A weaker dollar and a broader macro momentum, including investors’ position for a recovery in the oil sector this year, could support oil prices, said Virender Chauhan, an analyst at Energy Aspects.
“Maybe there could be some positive sentiment from OPEC + to stop the supply in the light of the virus growing its ugly head in the West,” he added.
Mohammed Barkindo, secretary general of the Organization of the Petroleum Exporting Countries (OPEC), said on Sunday that demand for crude had risen by 5.9 million barrels (bpd) per day this year to 95.95 million bpd. This group does a lot of damage when it is expected to happen. Demand risks in the first half of 2021.
“We are emerging from years of decline in just one year of deep investments, massive job losses and record-breaking worst demand,” he said.
Although the world’s largest manufacturers have agreed to record output cuts during the year, prices have improved from the impact of the global economic lockdown measures imposed on COVID-19 by about 20% compared to the 2019 average of 20%.
Associate producers, including OPEC and Russia, a group called OPEC +, decided at a meeting last month to raise 500,000 barrels per day in January, expecting demand to increase, and agreed to meet every month to review the product.
Analysts at Energy Aspects and RBC Capital said OPEC + is likely to maintain January production levels in February.
“We expect the producer group to stop further production in February, with the Covid-1 climb case going ahead and the vaccine rolling out slower than expected,” said RBC Capital’s Helima Krutf.
In the United States, crude oil production remained under pressure from weak prices and weak demand, which fell to two million barrels (bpd) per day in October-October this year.
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