Oil prices back on the rise prior OPEC + meeting

Shafaq News/ Oil prices were little changed on Monday, with the Organization of the Petroleum Exporting Countries (OPEC) considering meeting as soon as this week to discuss whether to extend record production cuts beyond end-June.

Brent crude LCOc1 was unchanged at $37.84 a barrel, in the first day of trading in the contract with August as the front month.

West Texas Intermediate (WTI) crude futures CLc1 for July delivery were at $35.53 a barrel, up 4 cents, or 0.1%, by 0629 GMT

The price falls come after front-month Brent and WTI prices posted their strongest monthly gains in years in May. Gains were boosted by OPEC crude production dropping to its lowest in two decades, with demand expected to recover as more nations emerge from coronavirus lockdowns.

“The focus is very much on OPEC+,” OCBC economist Howie Lee said, referring to OPEC and its allies including Russia. OPEC+ agreed in April to reduce output by an unprecedented 9.7 million barrels per day (bpd) in May and June after the coronavirus pandemic ravaged demand.

“We might see a cautious pullback in (crude) prices given that downstream prices haven’t caught up ... but if OPEC+ does come up with a three-month extension, there’s a possibility that prices may hit the $40 level,” Lee said.

OPEC + agreed in April to cut production by an unprecedented amount of 9.7 million barrels per day in May and June, following the collapse in demand from Corona pandemic.