Oil prices have declined as investors focus on a technical meeting by OPEC this week, which is expected to recommend an easing in supply cuts that have been supporting crude prices.
Brent crude futures were down by $0.27 to $42.97 a barrel while US West Texas Intermediate (WTI) crude futures dropped by $0.28 to $40.27 a barrel, Reuters reported.
According to the news agency, OPEC’s Joint Ministerial Monitoring Committee (JMMC) will meet on 14-15 July to recommend the next phase of cuts.
Last week, oil prices slightly changed due to a resurgence of Covid-19 cases in the US.
This prompted several US states to impose strict travel restrictions that could slow down the recovery of fuel demand.
However, prices increased more than 2% on 10 July after an upward revision by the autonomous intergovernmental organization International Energy Agency (IEA) in its 2020 oil demand by 400,000bpd.
Oil prices have recovered after the Organization of the Petroleum Exporting Countries (OPEC), Russia and allies, together known as OPEC+, has been reducing supply by approximately 9.7Mbpd since 1 May.
Earlier last month, the group also agreed to extend output cuts until the end of this month.
AxiCorp chief global markets strategist Stephen Innes was quoted by the news agency as saying: “The planned easing of OPEC+ production cuts next month … and a potential rebound in US production could add pressure on the supply side of the equation.”
Furthermore, OPEC member Libya, which has been blockaded since January, exported its first crude cargo on 10 July, with Libya’s state-owned National Oil Corp lifting force majeure at the Es Sider oil terminal on 8 July.