Proposed OPEC meeting pushes oil prices downward

Oil prices fell slightly as shipping traffic resumed through the Suez Canal after days on hold and attention now switched to an OPEC+ meeting this week where the extension of supply curbs may be on the table amid new coronavirus pandemic lockdowns.

Brent crude was down 15 cents, or 0.2 per cent at $64.83 a barrel after gaining 0.6 per cent on Monday, while the U.S. oil was down 1 cent at $61.55 a barrel, having fallen 1 per cent in the previous session.

Ships have started moving through the Suez Canal again after tugs refloated the giant Ever Given container carrier, which had been blocking a narrow section of the passage for almost a week, causing a huge build-up of vessels around the waterway.

With the likelihood that the disruption will prove minimal, the market is turning its focus to Thursday’s meeting of the Organisation of the Petroleum Exporting Countries (OPEC), and allies including Russia in Vienna, collectively known as OPEC+.

They will discuss whether to keep in place curbs on output that have kept millions of barrels a day off the market to support prices, a strategy that has largely worked in recent months.

Saudi Arabia is prepared to accept an extension of the production cuts through June, and is also ready to prolong voluntary unilateral curbs amid the latest wave of coronavirus lockdowns, a source briefed on the matter said on Monday.

“Market expectations for no change to output are largely priced in. The revival of heavy coronavirus caseloads in Europe has put a brake on oil’s resurgence,” said, economist at OCBC Bank in Singapore, Howie Lee