Oil prices fall on slow coronavirus recovery, Bonny Light loses $0.57

Oil prices slipped further on Friday but came close to a five-month high as a relaxation of coronavirus lockdowns support a slow fuel demand recovery, while top crude producers plan to curb supply.

Brent crude futures dropped by 32 cents or 0.71% to $44.58 per barrel at 10:34 West Africa Time while U.S. West Texas Intermediate (WTI) crude futures were down by 34 cents or 0.79% at $42.50 a barrel but on track for a weekly gain of about 1.1%.

Nigeria’s chief oil grade, Bonny Light, shed 57 cents or 1.28% to close at $44.05 per barrel on Thursday just as Qua Iboe, another major national grade, dipped by 17 cents or 0.38% to $44.96.

The economic recovery of the euro zone from its most profound slowdown in history has stuttered this month as the stifled demand triggered by the easing of lockdowns in July had declined, a survey revealed on Friday.

India’s oil imports diminished in July to their lowest levels since March 2010 amid renewed coronavirus lockdowns and refinery maintenance in another sign of the sluggish pace of recovery.

“An imminent return to higher crude demand (in India) remains doubtful,” Vienna-based consultancy JBC Energy said in a note.

Read also: Oil prices fall over demand risk, drop in stockpiles; Bonny Light sheds $0.06

The Organisation of the Petroleum Exporting Countries (OPEC) and allies including Russia were determined on ensuring members who had overproduced against their commitments would cut their output.

Reuters reported that the OPEC+ group discovered that a couple of members need to reduce supply by 2.31 million barrels per day (bpd) to offset their recent oversupply.

Nigeria and Iraq were the least compliant of OPEC members and even the United Arab Emirates, which made further voluntary cuts in June, overproduced by around 50,000 bpd over the May-July period.

The internal report also flagged demand risks, demonstrating that OPEC+ anticipates oil demand in 2020 to fall by 9.1 million bpd, up by 100,000 from its earlier forecast.

2020 demand might fall by 11.2 million bpd if a protracted second wave of infections hits India, China, Europe and the United States in the second half of the year, the report added.