Crude Oil Futures Settle Lower As OPEC Decides To Trim Production Cuts
Crude oil futures settled lower on Thursday on worries about outlook for near term energy demand and the latest decision by OPEC+ to start tapering production cuts from next month.
Rising tensions between the U.S. and China, and the relentless surge in new coronavirus cases that raises fears that many countries across the world might resort to fresh lockdown measures have once again triggered concerns about energy demand.
Wednesday’s data from the Energy Information Administration that showed U.S. crude inventories dropped by 7.5 million barrels last week, nearly four time the expected drop of about 2.1 million barrels, helped limit oil’s slide.
West Texas Intermediate Crude oil futures for August ended down $0.45 or about 1.1% at $40.75 a barrel.
Brent crude futures were down $0.45 or 1% at $43.35 a barrel.
On Wednesday, the OPEC and its allies agreed to start trimming oil production cuts from August, reducing their cuts to 7.7 million barrels per day till December. Earlier, the deal was to cut production by 9.7 million barrels per day. The OPEC+ was in compliance with agreed cuts in May and June.
At a press conference following a meeting of the group, Saudi Arabia’s Minister of Energy Prince Abdulaziz bin Salman said actual cuts, including the reductions from countries compensating for that overproduction, will be at roughly 8.1 million to 8.2 million barrels per day, pending data from June.