Oil edged higher after jumping the most in three weeks on Monday on increasing signs OPEC+ will delay a planned easing of output cuts.
Futures in New York traded near $37 a barrel after rising 2.9% in the previous session. Energy Minister Alexander Novak met with Russian producers on Monday to discussdelaying an easing of production cuts by three months. OPEC+ has been dropping hints for weeks that its plan to add almost 2 million barrels a day of supply from January is being reconsidered as demand falters.
Soaring virus cases in Europe and the U.S. as well as rising output fromLibya pushed crude down as much as 6% early on Monday. The pandemic’s second wave could see global oildemand drop to 88 to 89 million barrels a day, said Trafigura Group Chairman Jeremy Weir. That’s more than 10% lower than in 2019, based on data from the International Energy Agency.
The rest of the week promises to be as turbulent as the start with Americans heading to the polls on Tuesday for an election that could reshape U.S. policy on everything from fiscal stimulus to Iran and fracking. China, meanwhile, remains the bright spot for global demand, with authoritiesraising the quota for use of overseas oil by non-state entities next year by more than 20%.
The rise in the import quota is equivalent to about 823,000 barrels a day. Saudi Arabiashipped at least 1.8 million barrels a day of crude to China in October, the most since April, tanker-tracking data compiled by Bloomberg shows.
Even as OPEC and its allies look likely to delay adding more output, some members — including Iraq and Nigeria — are seemingly undermining the group’s efforts to shore up oil markets.Production from the Organization of Petroleum Exporting Countries jumped by 470,000 barrels a day in October to 24.74 million a day, according to a Bloomberg survey.
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