(London) Oil prices started the week down slightly on Monday as investors remained alert to the progression of the COVID-19 pandemic, a compass for anticipating the evolution of demand for black gold.
At around 5:45 a.m., a barrel of North Sea Brent for September delivery was worth $ 42.87 in London, down 0.63% from Friday’s close.
In New York, WTI’s US barrel for August dropped 0.74% to $ 40.29.
The past week saw benchmark prices remain virtually unchanged, with Brent falling 0.2% and WTI grabbing 0.1%.
The oil market is as “paralyzed”, estimates Tamas Varga, analyst of PVM, evoking the restricted range in which evolve the reference prices for several sessions, as “if the financial investors had gone on vacation”.
After the OPEC + decision last week, market players “only have two types of information”, summarized Bjornar Tonhaugen, of Rystad Energy.
This is “the weekly level of oil stocks (crude in the United States, published every Wednesday, Editor’s note) and the evolution of the COVID-19 pandemic, the latter being in direct correlation with the demand to come in oil, ”he added.
The pandemic continues to spread and has killed more than 600,000 since the end of December, according to a report established by AFP on Sunday at 7 a.m.
The United States is the hardest-hit country and has recorded more than 60,000 cases of COVID-19 daily in the past six days, according to Johns Hopkins University.
On the supply side, part of the uncertainties that hovered at the beginning of last week were lifted by the Organization of the Petroleum Exporting Countries (OPEC) and their allies, which decided on Wednesday to maintain the march of the reduction of their voluntary cuts of crude production.
They will drop from 9.6 million barrels per day (mbd) currently “to a total of 8.1 to 8.2 mbd in August” according to the calculations of the Saudi Minister of Energy, Prince Abdelaziz bin Salman, which correspond to the 7.7 mbd registered in the initial schedule plus the compensation expected from countries that have not respected their quotas.
On this last point, “the discipline observed by the signatories of the agreement seems to convince the market”, indicated Eugen Weinberg, of Commerzbank.