(Bloomberg) — Oil slipped in Asia, trading near last week’s three-month lows, as the market braces for reduced consumption after the U.S. summer driving season and traders look to this week’s OPEC meeting.
Futures in New York fell as much as 0.8%, after nudging up 0.1% Friday. The Organization of Petroleum Exporting Countries and its allies will meet Thursday to discuss the state of the market amid a stalling recovery from April’s price rout. The pandemic continues to rage in some parts of the world, forcing prices back below $40 a barrel in September for the first time since June.
There is at least a glimmer of hope that a vaccine isn’t far away, with The University of Oxford and AstraZeneca (NYSE:AZN) Plc saying at the weekend that they have restarted a U.K. trial of an experimental Covid-19 drug after it was halted over concerns about a participant who fell ill.
U.S. crude dropped 6.1% last week to seal its first back-to-back weekly loss since April’s rout, with the end of the summer driving season and concern about OPEC’s production compliance weighing down on prices.
Uncertainty over how much supply OPEC+ is returning to the market adds another wrench in the recovery for oil prices still reeling from the pandemic-driven blow to consumption. While U.S. supplies had grown tighter in past months and producers were expected to restrain production amid a weak financial backdrop, stockpiles rose again last week for the first time since mid-July.
Read: Flagging Asian Demand Sees Oil Sellers Brace for Price Battle
Iraq has cut pricing for all of its crude grades for sale to Asia and the U.S. for October, following similar reductions by Saudi Arabia and other Gulf producers and further signaling that a global demand rebound is faltering.
In Libya, a military commander seeking to oust the country’s United Nations-backed government will let the oil industry reopen after an eight-month blockade that’s all but halted exports, according to U.S. diplomats.
©2020 Bloomberg L.P.