Commodities
  • Brent Crude$74.09 -0.40%
  • Natural Gas$3.23 -0.68%
  • Gasoline$2.16 +0.05%
  • Heating Oil$2.10 +0.06%
  • Gold$1859.50 +0.27%
  • Silver$27.80 +0.44%
  • Copper$4.39 +1.20%
  • OPEC$71.99 +0.95%
  • WTI Crude$72.01 -0.19%
  • Home
  • News
  • Oil & Gas
  • Oil prices drop on OPEC output call and the surging of Indian Covid cases

Oil prices drop on OPEC output call and the surging of Indian Covid cases
Oil & Gas | 05 April 2021

Oil fell after OPEC chose to increase output from next month and Covid cases in India surged, conceivably sapping demand in the world’s third-greatest importer.

West Texas Intermediate and Brent both dropped as much as 2.4%, paring gains on Thursday, the last day of trading because of a holiday on Friday. OPEC selected last week to raise production by an excess of 2 million barrels per day between May and July.

Crude has rallied for the current year as vaccine rollouts assist significant economies with resuming. The decision by the Organization of Petroleum Exporting Countries and its allies was viewed as a vote of confidence in the outlook for energy demand. The U.S. also added more than 900,000 jobs in March that was the most in seven months.

All things considered, while that looks good for oil demand, critical dangers, for example, the uptick in Indian cases verifies a complex worldwide picture.

Prince Abdulaziz bin Salman, Saudi’s Energy Minister, affirmed that after the OPEC decision was reported the group can in any case reverse course if necessary at its next meeting on April 28.

"OPEC+ tapering was all the more a compromise" than an indication of trust in the market's recovery, said Vandana Hari, founder of Vanda Insights in Singapore. A rollover "may have strained the cohesion in the alliance."

Goldman Sachs Group Inc. stays bullish, saying "a lot more" output will be needed over the northern hemisphere’s summer to compensate for rising demand.

Prices:

  • WTI for May lost 1.8% to $60.35 a barrel on the New York Mercantile Exchange at 10:33 a.m. London.
  • Brent for June settlement dropped 1.8% to $63.68 a barrel on the ICE Futures Europe exchange.
  • Murban for June conveyance traded 2.5% lower at $62.32 a barrel on the ICE Futures Abu Dhabi exchange.

Saudi Arabia on Sunday raised prices for May oil shipments to Asia. Aramco, the state energy firm, will increase its evaluations to the region by 20 to 50 cents a barrel from April. Most prices for North West European clients will not be changed, while most grades to the U.S. will be cut by 10 cents.

The move indicated Saudi Arabia's trust in Asian demand recuperating further. All things being equal, new limitations in India's financial hub of Mumbai are weighing on oil prices, said Edward Bell, senior director for market economics at Emirates NBD PJSC in Dubai.

"It's a pretty big risk," he said. "You could have one of these significant economies being pulled out of the demand growth story."

An acceleration of vaccinations in the U.S. appears differently concerning setbacks elsewhere. In France, cases have flooded because of more infectious variations, forcing a third lockdown. "Crude might be in a stalemate for the time being," said Hari. "I expect a continuing tug-of-war."

Brent's prompt time spread was 36 cents a barrel in backwardation. That is a bullish example with near-term prices trading at a premium to those farther and it's up from 6 cents last Monday.

information

You Can Chat or Close the window

close

ACTIVITY ON YOUR ACCOUNT

This feature provides information about the activities on your EEXCOM account.

Recent activities:

Access Type (Browser, mobile, etc.)LocationIPDate & Time