Oil down but OPEC+ member pledges on cuts cap losses
LONDON, August 7, 2020 – Oil was down on Friday morning in Asia as some of the biggest oil producing members of the Organization of the Petroleum Exporting Countries and Allies (OPEC+) vouched to fully commit to production cuts.
WTI futures slid 0.41% to $41.78 by 12:09 AM ET (5:09 AM GMT) and Brent oil futures dropped 0.33% to $44.93.
The Iraqi state news agency said on Friday that Saudi Arabia and Iraq have stressed that they will fully commit to cutting production under an earlier OPEC deal reached in April that cut production by 9.7 million bpd. Under that deal, Iraq is expected to cut output by 1.06 million barrels, pushing oil prices up.
Earlier on Thursday, Iraq also pledged to make additional production cuts of about 400,000 bpd to compensate for its overproduction over the past months in violation of the OPEC+ supply reduction pact.
The impact of Covid-19 on fuel demand also continue to affect countries around the world contributing to the drop in the black liquid.
The Institute for Health Metrics and Evaluation said that the US is now forecasting 295,011 deaths by December. Meanwhile, global Covid-19 cases surpassed 19 million and the U.S. death toll to date surpassed 160,000, according to Johns Hopkins University data, creating fresh fears that drastic lockdowns may be imposed again.
“Concerns over continuing oil demand recovery remain in place,” Vandana Hari, founder of Vanda (NASDAQ:VNDA) Insights in Singapore told Bloomberg. “The pandemic is not worsening, but it’s not becoming any better either.”