Oil slips below $45 on demand doubts, rising supply
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[August 14, 2020] By
Alex Lawler
LONDON (Reuters) - Oil slipped further
below $45 a barrel on Friday, giving up this week's gains, under
pressure from doubts about demand recovery due to the novel coronavirus
pandemic and rising supply.
Two prominent forecasters, the International Energy Agency and the
Organization of the Petroleum Exporting Countries, trimmed their 2020
oil demand forecasts this week. [IEA/M] [OPEC/M] OPEC and its allies are
increasing output this month.
"Pessimism about this year's oil demand growth prospects is due to the
weakening outlook in the coming months," said Stephen Brennock of oil
broker PVM.
"To make matters worse, global oil supply is on the upswing."
Brent crude <LCOc1> was 37 cents, or 0.8%, lower at $44.59 by 0940 GMT,
heading for a flat week. U.S. West Texas Intermediate <CLc1> slipped 41
cents, or 1%, to $41.83.
"Although both contracts continue to consolidate at the upper end of
their two-month trading ranges, they lack the momentum to stage
meaningful rallies at this stage," said Jeffrey Halley of brokerage
OANDA.
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The sun is seen behind a
crude oil pump jack in the Permian Basin in Loving County, Texas,
U.S., November 22, 2019. REUTERS/Angus Mordant
Prices had been bolstered this week by U.S. government data showing crude oil,
gasoline and distillate inventories all fell last week as refiners ramped up
production and demand for oil products rose. [EIA/S]
Oil has recovered from lows touched in April, when WTI briefly turned negative.
Still, a rise in the number of coronavirus infections has limited gains. India
reported another record daily rise in cases on Thursday.
OPEC and allies including Russia, a group known as OPEC+, have cut output since
May by around 10% of pre-pandemic global demand to support the market. The deal
calls for an increase in output this month as demand recovers.
An OPEC+ panel meets next week to review the market and is not expected to tweak
the agreement.
(Additional reporting by Aaron Sheldrick; Editing by Kirsten Donovan and Ken
Ferris)
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