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Oil prices head for second monthly decline; Bonny Light sheds $1.73

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Oil prices fall after U.S. stockpile rise trigger supply worries

Oil prices slipped in and out of negative territory on Friday but remained on track for a second monthly drop as increasing coronavirus cases in Europe and the United States raise concerns over fuel consumption.

Brent crude inched up 11 cents or 0.29% to $37.76 per barrel by 11:16 West Africa time after plumbing a five-month low in the previous session.

U.S. West Texas Intermediate (WTI) crude was at $36.23 a barrel, up 6 cents or 0.17% after sliding to its lowest level since June on Thursday. It is on course for a 10% monthly decline while Brent approaches an 8% fall.

Bonny Light, Nigeria’s premium oil grade, dipped by $1.73 or 4.44% to $37.23 at the previous session while Qua Iboe, another major national oil grade, weakened by $1.20 or 3.02% to $38.53.

Prices had oscillated between parity and over 2% fall during Friday’s session, with the market jittery about re-imposed lockdowns in Europe and the U.S. election next week, a Singapore-based oil dealer said.

Read also: Oil prices drop by 2% as COVID-19 pushes demand fears, Bonny Light down $0.49

The United States dollar measured against a basket of currencies has also strengthened this week, causing dollar-denominated oil to be costlier for holders of other currencies.

The Organisation of the Petroleum Exporting Countries (OPEC) and allies led by Russia, A cartel known as OPEC+, in January decided to lift supply by 2 million barrels per day (bpd).

But major producers like Saudi Arabia and Russia prefer maintaining the group’s current production cut of about 7.7 million bpd into 2021 amidst lockdowns in Europe and rising Libyan supply.

OPEC is due to conduct a policy meeting over 30th November and 1st December.

In Europe, countries introduced new lockdowns this week to contain coronavirus spread, with Germany declaring its economy will not fully rebound before 2022.

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