The prices of Western Texas Intermediate (WTI), Brent Crude, OPEC Basket holds above $40 per barrel on Monday. However, the rising cases of Covid-19 in the U.S and other parts of the world may dash the recovery optimism.
Brent Crude trades around the $43 dollar mark as investors shrug off the rising cases of Covid-19 amid the return of economic activities.
The extended OPEC deal that will cut production by 9.7 million barrels per day through July, plays its part in ensuring tighter supply.
The Wall Street Journal reported last week that Saudi Energy Minister Prince Abdulaziz bin Salman had threatened Nigeria, Angola, and Iraq with another oil price war if they didn’t get in line with the production cuts.
At 5:16am GMT on Monday, Brent is trading at $43.10 per barrel while WTI is selling at $40.51 per barrel.
OPEC basket closed at $42.89 per barrel whereas Nigeria Banner oil Bonny Light closed at $43.33 per barrel. The current price of oil is well above the Nigeria 2020 budget oil benchmark which was settled at $28 per barrel after several reversals.
The dark days may be over for oil as global demand is being boosted by reopening of businesses and travels in several countries. Domestic flights is set to resume in Nigeria on Wednesday, 8 July
Europe is reopening its borders as new Covid-19 cases in the region maintains the decline trend.
The U.S economy added a record 4.8 million jobs in June, dropping the unemployment rate to 11.1%, according to the data released by the U.S Bureau of Labor Statistics on Thursday, but a surge in new infections and a spate of new closings threatens the nascent recovery.
Libya’s oil exports are expected to slide this month as forces opposed to the government continue to block shipments.
Libya will export two oil cargoes totaling 1.2 million barrels in July — a third less than in June. The Bouri and Farwah terminals will each ship one cargo of 600,000 barrels, according to an initial loading program. That compares with 1.8 million barrels shipped for all of June according to Bloomberg report.
The rising number of new infections in the United States, South American region, Africa and India pose a threat to the full rebound of economic activities.
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The global cases of Covid-19 stands at 11,119,707 with 6,179,006 recoveries and 534,267 deaths at the time of this report according to John Hopkins Corona Virus Resource Centre.
Michael McCarthy, chief market strategist at CMC Markets Asia Pacific in Sydney, said that futures have probably peaked for now.
“There is increasing concern over demand with the global high in infection rates and the number of countries in the world looking at reintroducing lockdown measures,” he said.