Oil prices dipped on Tuesday even though they mostly held onto overnight gains after OPEC+ said the producer grouping is almost fully complying with production cuts to bolster prices amid a fall in fuel demand due to the coronavirus pandemic.
Brent crude was down 11 cents, or 0.24%, at $45.26 a barrel by 11:00 West Africa Time, after gaining 1.3% on Monday.
U.S. crude was down 16 cents, or 0.37%, at $42.73 a barrel, having risen 2.1% in the previous session.
A technical discovered compliance with OPEC+ oil production cuts in July was between 95% and 97% according to draft report seen by Reuters.
The panel considered a scenario of significant downside risk to oil demand if the coronavirus pandemic situations exacerbate, the report said, calling for ‘vigilance and close monitoring of the implementation of the compensation for overproduction.’
The Organisation of the Petroleum Exporting Countries (OPEC) and its allies, a grouping known as OPEC+, reduced their cuts in August to 7.7 million barrels per day (bpd) from 9.7 million.
OPEC+ will hold a ministerial panel meeting on Wednesday. Russian Energy Minister Alexander Novak will join the video meeting despite testing positive to COVID-19, the country’s energy minister said on Tuesday.
Oil prices have started to pick up in recent months, causing Australian miner and oil producer BHP to strike an upbeat note in its earnings on Tuesday.
‘We believe that the most significant risks to the physical (oil) market have now passed,’ the company said, adding that the pace of gains could be modest.
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