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Oil reversed earlier losses to rise on Tuesday morning after OPEC+ expressed optimism that the market looks “significantly improved,” while major importer India called on the group once again to ease the cuts and stop the price rally, which threatens demand recovery from price-sensitive buyers.
As of 9:36 a.m. on Tuesday, WTI Crude prices were up by 0.77 percent at $73.47 and Brent Crude was up 0.70 percent trading at $75.17.
The market reacted today to the bullish outlook from OPEC+, which began its meetings this week with a review of the oil market and future growth prospects.
“The overall brighter picture in relation to the pandemic recovery efforts has led to significantly improved oil market conditions and prospects for future growth,” OPEC Secretary-General Mohammad Barkindo said at the meeting of the Joint Technical Committee (JTC) on Tuesday.
On Monday and in Asian trade early on Tuesday, oil prices were down as health experts warned of the rapidly spreading Delta variant of COVID, which has already prompted several countries in Europe, which are popular holiday destinations for UK tourists, to impose quarantines for non-vaccinated Britons.
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OPEC+ noise and the potential economic and fuel demand impacts of a spreading Delta variant will likely be the key factors in oil price trends this week. The OPEC+ alliance is expected to decide on July 1 how to proceed with its collective production cuts. The group, which has been gradually easing those cuts in recent months, still keeps as much as 5.7 million barrels per day (bpd) off the market.
Analysts largely expect OPEC+ to decide on Thursday to further ease the cuts as of August 1, with most experts gravitating toward a 500,000-bpd increase for the month of August.
But India, the world’s third-largest oil importer, called on OPEC+, again, to rein in the price of oil which, at $75 a barrel, is “challenging” for price-sensitive buyers and threatens their oil demand recovery.
“Today’s price is a very challenging one,” India’s Oil Minister Dharmendra Pradhan said at a BNEF Summit, as carried by The Hindu. “I am persuading my producer friends” to work for a reasonable oil price, he added.
“OPEC meeting is supposed to be there in the next few days, and I hope the price will be a little bit sober, that is our expectation,” Pradhan said.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.