LONDON: Oil prices steadied on Monday as rising COVID-19 cases around the globe and oversupply worries fuelled by the prospect of OPEC and its allies winding back output cuts were offset by positive industry data in Europe and Asia.
Brent crude rose 5 cents, or 0.1pc, to $43.57 a barrel by 1344 GMT while US West Texas Intermediate (WTI) crude gained 6 cents, or 0.1pc, to $40.33.
Over the past month, Brent has been trading in a range between $41 and almost $45.
“Oil continues to trade in an incredibly rangebound manner,” said Warren Patterson, ING’s head of commodities strategy.
“Speculators appear to be getting more nervous about the demand recovery, with the path much more gradual than market expectations coming into the second half of the year.”
Coronavirus cases have continued to climb in the United States and have reached almost 18 million globally, with more countries imposing new restrictions or extending existing curbs in an effort to control the pandemic.
While fuel demand recovers slowly in the face of the resurgence of the virus, investors are also worried about oversupply as the Organization of the Petroleum Exporting Countries (OPEC) and its allies, a group known as OPEC+, prepare to ease oil supply cuts from August.
“Concerns appear to be developing that a rise in OPEC+ production will coincide with uneven recovery in oil demand due to localised setbacks following secondary waves of COVID outbreaks,” said Harry Tchilinguirian, head of commodity research at BNP Paribas.
OPEC+ members have been cutting output since May by 9.7 million barrels per day (bpd). From this month cuts will officially taper to 7.7 million bpd until December.
Russian oil and gas condensate output increased to 9.8 million bpd over Aug. 1-2, from 9.37 million bpd in July, a source familiar with data said on Monday.
Oil prices fell earlier in the session but found some support after a survey showed manufacturing activity across the eurozone expanded last month for the first time since early 2019. Positive manufacturing data in Asia also helped to support oil prices.
A Reuters poll on Friday indicated that oil is set for a slow crawl upwards this year as the gradual easing of coronavirus-led restrictions buoys demand, though a second COVID-19 wave could slow the pace of a recovery.