Oil prices have slipped as major oil producers are concerned over the slow recovery of global fuel demand.

Short-covering ahead of a meeting this week with Organization of the Petroleum Exporting Countries (OPEC) and its allies, together known as OPEC+, restricted further losses.

Brent crude LCOc1 fell by $0.05, or 0.1%, to reach at $39.56 a barrel, while US West Texas Intermediate (WTI) CLc1 futures were down by $0.03, or 0.1%, to settle at $37.23 a barrel, Reuters reported.

Sunward Trading chief analyst Chiyoki Chen was quoted by the news agency as stating: “Sentiment in oil markets remained gloomy due to bleak demand outlook by oil producers and as a resurgence in Covid-19 cases in many countries fuelled concerns over a slower pick-up in global fuel demand.

“Brent and WTI are likely to stay between $35 and $40 a barrel until US demand for heating oil starts picking up as the peak driving season has ended.”

In a monthly report, OPEC said that the world oil demand will reduce by 9.46 million barrels per day (Mbpd) this year. This figure is more than the 9.06Mbpd decline expected a month ago.

How well do you really know your competitors?

Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.

Company Profile – free sample

Thank you!

Your download email will arrive shortly

Not ready to buy yet? Download a free sample

We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form

By GlobalData
Visit our Privacy Policy for more information about our services, how we may use, process and share your personal data, including information of your rights in respect of your personal data and how you can unsubscribe from future marketing communications. Our services are intended for corporate subscribers and you warrant that the email address submitted is your corporate email address.

Meanwhile, investors are keenly awaiting the decision of the joint ministerial monitoring committee (JMMC) by OPEC+ on 17 September.

The market monitoring panel of the OPEC+ Group will meet to discuss compliance with deep supply cuts.

According to Reuters, analysts don’t expect any further cuts despite Brent crude prices falling below $40 a barrel in the past few days.

Energy companies, ports and refiners have evacuated staff and reduced offshore production in the Gulf of Mexico as tropical storm Hurricane Sally raced towards the central US Gulf Coast.

Oil production in the region has been interrupted by storms for the second time in less than a month after hurricane Laura.

Chen added: “Still, the support is limited as oil prices came off quickly after the first hurricane passed, with energy companies being able to make proper preparations ahead of time.”