The oil price remained unaltered on Friday , as the number of COVID cases increasing day by day in many countries. With trading marked by growing uncertainties, the main producers were about to loosen the production curbs but the cases are increasing, the usage rate gets lowered again.
Brent crude futures were steady at $43.37 a barrel, while U.S. West Texas Intermediate (WTI) rose 1 cent to $40.76 a barrel at 0204 GMT. To end the week up slightly both were in the track.
As the cases increase Brazil stepped up to lockdown measures. Australia and Spain reported their steepest daily jumps in more than two months, cases continued to soar up in India.75,000 new COVID-19 cases, a new daily record was reported by the United Nations.
On Thursday two benchmark contracts fell 1 percent after allies and the Organization of the Petroleum Exporting Countries (OPEC), together known as OPEC+. Record supply cuts of 9.7 million barrels per day (bpd) were agreed to trim, which was imposed earlier this year from August by some 2 million bpd.
As countries like Iraq which overproduced, when the actual output additions will be closer to 1.1 million bpd, compared with their commitments to stop supply in May through July agreed to bigger reductions in august and September.
Commonwealth Bank of Australia analyst Vivek Dhar, said the market took some heart with understanding for some to make up for past non-consistence with responsibilities at a time when there is vulnerability over demand growth.
They are taking those safety measures. That gives the market certainty that OPEC+ is looking cautiously at those conditions to ensure they try not to push the market in a misleading direction.
The market should remain in the $40-45 a barrel range, according to the analyst, with the approaching return of some U.S. and vulnerability over fuel demand as new lockdown might be required to stop the upturn of COVID19 cases.
Presently the issue with the market is price level is high and the concern is that the U.S. supply will be back again. India started importing oil from the US in 2017, brought in 1.9 million tonnes (38,000) in 2017-18, 6.2 million (1,24,000 bpd) in 2018-19, and in the first 6 months of the current fiscal year (2019-20)5.4 million tonnes.