Oil prices retreat ahead of OPEC meeting, production level talks

SINGAPORE – Oil prices edged down on Monday, the first trading day of 2021, ahead of a meeting of OPEC and allied producers to discuss production levels for February as fears of first-half demand creep in in the market as the coronavirus pandemic persists.

Brent for March was at $ 51.76 a barrel, down 4 cents or 0.08%, at 0038 GMT, while US West Texas Intermediate crude for February fell 9 cents, or 0.2%, at $ 48.43 per barrel.

Mohammad Barkindo, secretary general of the Organization of the Petroleum Exporting Countries (OPEC), said on Sunday that while demand for crude is expected to increase from 5.9 million barrels per day (bpd) to 95.9 million bpd this year , the group sees many drawbacks. demand risks in the first half of 2021.

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“We are just beginning to emerge from a year of steep investment cuts, huge job losses and the worst destruction of crude oil demand on record,” he said.

Oil prices edged down on Monday, the first day of trading in 2021, ahead of a meeting of OPEC and allied producers to discuss production levels for February as fears of first-half demand creep into the market. market as the coronavirus pandemic persists. Photo (Jason Alden / Bloomberg via Getty Images)

Prices ended 2020 around 20% below the 2019 average, still recovering from the impact of global economic lockdowns imposed to tackle COVID-19 which has reduced demand for fuel, even as major producers Global agreed to record production cuts throughout the year.

OPEC and allied producers, including Russia, a group known as OPEC +, decided at a meeting last month to increase production by 500,000 barrels per day in January, anticipating an increase of demand, and have agreed to meet monthly to review production.

Analysts at Energy Aspects and RBC Capital said OPEC + was likely to maintain January production levels through February.

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“We believe the producer group will choose to forgo any further production increases for February, as COVID-19 cases continue to rise and vaccine deployment slower than expected,” said Helima Croft of RBC Capital.

In the United States, crude oil production has remained under pressure from weak prices and lukewarm demand, down more than 2 million barrels per day (bpd) in October from the start of this year, according to a government report on January 1.