Oil prices fall as economic worries offset squeeze in supplies
- G20 warns COVID-19 variants threaten global economic growth
- US adds oil and gas rigs for second week in a row – data
SINGAPORE, July 12 (Reuters) – Crude futures fell on Monday as concerns over slowing global growth outweighed the prospect of tight supply after talks between the main producers to increase production in the coming months.
Brent crude for September fell 15 cents, or 0.2%, to $ 75.40 a barrel at 12:11 GMT, while US West Texas Intermediate crude for August was at $ 74.44 a barrel, down from 12 cents, or 0.2%.
The spread of coronavirus variants and unequal access to vaccines threaten the global economic recovery, the chief financial officers of major G20 economies warned on Saturday. Read more
A Reuters tally of new COVID-19 infections shows they are increasing in 69 countries, with the daily rate pointing upwards since late June and now reaching 478,000. https://graphics.reuters.com/world-coronavirus-tracker-and-maps/
“We haven’t seen the impact yet, but at this rate it will hit demand sooner or later,” said a Singapore-based oil trader.
Oil prices fell last Tuesday after the Organization of the Petroleum Exporting Countries and their allies, a group known as OPEC +, failed to reach an agreement to increase production from August. Indeed, the UAE rejected a proposal to extend OPEC + production restrictions by eight months. Read more
“Prices will remain volatile as long as the stalemate remains,” said Howie Lee, an economist at Singapore’s OCBC bank.
“On the surface it looks like this should support prices, but the risk remains that a complete blackout will result in a price war similar to last year,” he said, adding that the likelihood of the latter event was low.
Saudi Arabia, the world’s largest oil exporter, responded to five buyers’ full contractual request for crude oil in August, but denied at least two requests for additional volumes. Read more
First-month WTI crude futures posted their sixth weekly gain last week after a bullish report from the US Energy Information Administration showed US crude and gasoline inventories fell as demand of gasoline has reached its highest level since 2019.
In response to rising oil prices, U.S. energy companies added oil and gas rigs for the second week in a row, according to data from Baker Hughes. Read more
Editing by Kim Coghill and Jacqueline Wong
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