Oil prices were known to stabilize on Wednesday amid concerns that fuel demand would continue to weaken. This is due to the increasing cases of coronavirus throughout Europe and in the United States. Both are the world's largest oil consumers and have a huge influence.
If there are more and more people there, then the situation could hamper economic growth. The Organization of the Petroleum Exporting Countries (OPEC) said in its monthly report on Tuesday that oil demand in 2021 will rise by 6.54 million barrels per day (BPH).
It means demand will rise to 96.84 million barrels per day or about 80,000 bpd less than it forecast a month ago. This condition exists as a result of economic dislocation caused by the coronavirus pandemic. Many countries still try to defeat this pandemic.
Latest Oil Data
Data for this commodity is also known to be still up and down. Brent crude futures for December fell as much as 8 cents or 0.2%. It means it will cost $42.37 a barrel. Meanwhile, U.S. West Texas Intermediate futures fell 9 cents, or 0.2%, to $40.11.
The heads of the world's two largest oil producers, Russian President Vladimir Putin and Saudi Crown Prince Mohammed bin Salman, discussed the current situation in the energy market. They did it by phone call. This is what the Kremlin said on Tuesday.
OPEC and allied producers such as Russia, a group is known as OPEC+, will stick to their plans to reduce oil production reductions starting in January. It just like Suhail al-Mazrouei as the United Arab Emirates energy minister, said on Tuesday.
Oil prices stabilized in Asia as the dollar rally stopped. It is also due to Russia and the Saudis showing a united front in making OPEC+ oil producers. They are fulfilling the promise of production cuts they promised. It was said by Edward Moya, the senior market analyst.
Price is Still Relatively Vulnerable
Crude oil prices are still vulnerable. It is because the COVID-19 continues to spread like widely in Europe. In fact, the virus tends to be higher in the US. On the supply side, the production of this commodity in the U.S. Gulf of Mexico continued to recover.
According to the data, the number closed fell to 44% on Tuesday. This comes after data showed a gain of 69% on Monday. U.S. crude inventories were seen falling last week. Meanwhile, distillate stocks are also likely to fall for the fourth week.
The situation is evident from a preliminary Reuters poll published on Tuesday. This count was done before a report from the energy Information Administration and American Petroleum Institute. Both reports were postponed a day due to the Columbus day off on Monday.
Uk Continues to Seek Deal with EU
The UK is rumored to be continuing to seek a deal with the EU in relation to Brexit. The country will expand its efforts to reach a post-Brexit trade deal with the European Union (EU) beyond the October 15 deadline. It is conveyed by a trusted source.
The source added that PM Johnson would decide whether to end the talks after the EU summit. This comes ahead of a crucial meeting between Johnson and European Commission President Ursula von der Leyen in a video call, which is likely to end the Brexit impasse.
Sure, this could open the door to a soft Brexit. Earlier today, Reuters and Bloomberg both reported that E.U. leaders are likely to signal an end to Brexit talks. There may be no breakthrough after the conclusion of the two-day summit on Friday.
On renewed Brexit optimism, GBP/USD jumped nearly 80-pips on the report. This figure is above, testing the level of 1.2980 before finally returning to 1.2930. Now it is rumored to still falter. The spot is still well above its five-day low of 1.2864.