On Sunday, oil futures markets gave up some of Friday's gains, in light of the advance of the coronavirus epidemic around the world and the OPEC technical meeting that is taking place this week. The West Texas Intermediate crude oil futures went down by 1.04 percent, closing the session at the 40.13 level, while the Brent oil futures dropped by 0.93 percent, closing the session at the 42.84 level.
On Friday, the International Energy Agency published claimed on its Oil Market Report that global oil demand went down by 10.75 million barrels per day in the second quarter. For the next quarter, they expect that global demand will only fall by 5.1 million barrels per day, as the global economy will recover because the governments have lifted up the lockdowns. This, added to the fact that the OPEC+ coalition has tried to keep the oil supply under control, could explain the advance of the oil prices since April, though in light of the possibility of seeing the U.S. supply rebounding this growth trend could eventually end.
The organization said that despite the progress in the oil markets, the spread of the Covid-19 poses a threat to the market outlook.
"While the oil market has undoubtedly made progress since “Black April”, the large, and in some countries, accelerating number of Covid-19 cases is a disturbing reminder that the pandemic is not under control and the risk to our market outlook is almost certainly to the downside," states the IEA report.
The OPEC's Joint Ministerial Monitoring Committee is set to meet this week, and analysts expect them to recommend easing the supply cuts in August, taking into account that demand levels are coming back to normal now that the governments are lifting up the restrictions they had to impose to stop the advance of the Covid-19.
The media has reported that Saudi Arabia is pushing for increasing the oil supply by 2 million barrels per day, increasing the current supply to 7.7 million barrels per day. The proposal may be backed by most coalition members.
At the moment there are about 13,041,728 confirmed Covid-19 infections around the world, as well as a death toll of 571,674. The United States leads in the number of infections, with 3,413,995 confirmed infections and a death toll of 137,782, followed by Brazil and India. The number of cases is peaking in certain places, for example the state of Florida reported on Sunday more than 15000 new cases, which surpasses New York's state record of 12847 new cases on April 10.
US stocks closed Friday's session as the Dow Jones Industrial Average advanced 1.44 percent, closing at the 26,075.30 level. Conversely, the S&P 500 gained 1.05 percent, closing the session at the 3,185.04 level, while the Nasdaq 100 closed the session at the 10,836.33 level, adding 0.76 percent. In Europe, the DAX added 1.15 percent, closing at the 12,633.71 level, followed by the CAC 40, gaining 1.01 percent and closing the session at the 4,970.48 level, while the IBEX 35 advanced the 1.16 percent, closing the session at the 7,321.10 level.