Energy

Oil markets: Crude output in focus

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A kayaker passes in front of an offshore oil platform in the Guanabara Bay in Niteroi, Brazil, Saturday, Feb. 1, 2020.

Dado Galdieri | Bloomberg | Getty Images

Oil prices were steady on Friday but are set for their first weekly gain in six weeks on the assumption major producers will implement deeper output cuts to offset slowing demand in China, the world’s second-largest crude user.

Brent crude futures fell 9 cents to $56.25 a barrel by 0234 GMT, after gaining 1% the previous session. Brent is 3.3% higher for the week, the first increase since the week of Jan. 10.

U.S. West Texas Intermediate (WTI) futures were down by 1 cent to $51.41 a barrel. The contract rose 0.5% on Thursday and is now 2.2% higher for the week.

Crude prices have plunged about 20% from their 2020-peaks on Jan. 8 as oversupply concerns combined with worries about large fuel demand declines in China as the country’s quarantine to fight a coronavirus outbreak has halted economic activity.

However, the Organization of the Petroleum Exporting Countries and its allied producers, known as OPEC+, are considering cutting output by up to 2.3 million barrels per day in response to the demand slump.

But other analysts caution the demand impact is only limited to China so far.

“The spread of the coronavirus remains extremely fluid and while market sentiment is held at the mercy of each passing coronavirus headline, our baseline thesis remains that oil demand destruction remains largely a China story and has yet to spill…



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