oil prices edge up, no cheers yet

By Agency Reporter

Although global oil prices edged up on Friday, they stirred little cheers as they are on track for a second monthly fall.

This is because of the growing concerns that the rise in COVID-19 cases in Europe and the United States could hurt fuel consumption.

Brent crude edged up 15 cents to $37.80 a barrel by 0451 GMT after touching a five-month low in the previous session.

U.S. West Texas Intermediate (WTI) crude was at $36.27 a barrel, up 10 cents.

“It looks like a dead cat bounce at this stage,” said Jeffrey Halley, senior market analyst, Asia Pacific, OANDA in Singapore.

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“With a European slowdown jeopardising global consumption and the return of Libyan production, the onus must now fall on OPEC+ to reconsider their 2 million barrel per day production increases in January.”

He added that oil prices are unlikely to sustain any rally in this environment short of a statement from OPEC+.

The Organization of the Petroleum Exporting Countries and their allies including Russia, a group known as OPEC+, are expected to raise their output by 2 million bpd in January as part of their production agreement.

However, top producers Saudi Arabia and Russia are in favour of maintaining the group’s output reduction of about 7.7 million bpd currently into next year as renewed lockdowns in Europe are threatening to cool demand again.