Tuesday, October 20, 2020

Although This Is OPEC's Stand, Do Not Remember It Will Not Change

 Oil prices fell for the fourth day in a row amid uncertainty over US fiscal stimulus, as well as OPEC and its ally OPEC + did not signal a change in plans to extend production cuts in January.

OPEC + previously planned to relax production cut commitments in January, from 7.7 million barrels a day to 5.8 million barrels a day.

This has added to the pressure on the crude oil market which is currently squeezed by concerns over the high spike in Covid-19 cases in Europe leading to the implementation of new sanctions.

In the Asian session, Brent crude futures fell 31 sen to $ 42.31 a barrel, while the US WTI fell 22 sen to $ 40.84 a barrel.

However, to allay market concerns, Saudi Arabia's Energy Minister Prince Abdulaziz bin Salman said that OPEC was very flexible and would adapt to changing circumstances when needed.

Although OPEC is likely to continue its plans to ease production cuts in January, the decision has not been formally set until meetings involving all members on November 30 and December 1.

Meanwhile, uncertainty over US fiscal stimulus continues to plague the market despite new hopes that an agreement can be reached before the presidential election.