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Oil prices have slipped due to concerns that fuel demand in the US might not recover quickly amid stalled talks on an economic stimulus package in the wake of the Covid-19 pandemic.
Brent crude futures decreased by $0.33 to reach at $45.13 a barrel while the US West Texas Intermediate (WTI) futures dropped by $0.22 to reach $42.68 a barrel, Reuters reported.
Nissan Securities general manager of research Hiroyuki Kikukawa was quoted by the news agency as saying: “Demand concerns weighed on oil prices, with US economic stimulus still nowhere in sight and US-Sino trade talks being postponed.”
On 18 August, US President Donald Trump said that he postponed the trade talks with China and has no plans to talk with the country right now.
Kikukawa added: “But losses were limited by positive news such as a drop in U.S. crude stocks.”
Data released by industry group American Petroleum Institute (API) indicated a decrease in the US crude inventories by 4.3 million barrels to around 512 million barrels while the data showed an increase in the gasoline stocks.
AxiCorp chief global market strategist Stephen Innes said: “It’s challenging to make heads or tails out of the oil market these days.
“The market is struggling to make new highs as demand concerns remain tethered to the hip of the coronavirus worries as OPEC returns more barrels to market this month.”
Meanwhile, investors are awaiting the future supply decision from the Organization of the Petroleum Exporting Countries (OPEC), and its allies, known as OPEC+, which will meet today.
Known as the Joint Ministerial Monitoring Committee (JMMC), the panel monitors OPEC+ supply cuts agreed earlier this year.
Last month, the JMMC recommended that the production cuts be eased from 1 August to 7.7Mbpd. From May until July, the cuts stood at 9.7Mbpd.
Russian Energy Minister Alexander Novak will also join the OPEC+ ministers’ video meeting despite testing positive for the coronavirus.