Oil price recovery ends as Russia walks out of OPEC+ meeting
NEW YORK (Bloomberg) --Oil pared gains after Russian Energy Minister Alexander Novak left the OPEC+ joint meeting in Vienna.
Futures in New York were little changed after earlier climbing as much as 2.6% on Wednesday. Prices had risen earlier in the session as OPEC+ discussed the option of cutting output by 1.5 million barrels a day. The market also shrugged off a build in U.S. crude stockpiles.
“A cut from OPEC of even 1 million barrels a day would be supportive to the market,” said Nick Holmes, portfolio manager at Tortoise. “Whether that will be enough is a big question mark. The market is still trying to discern how severe the impact from a global economic slowdown will be on oil demand.”
The coronavirus outbreak has worsened since the Joint Technical Committee first recommended a production cut of 600,000 barrels a day in February. OPEC and its allies are widely expected to agree on deeper output cuts, but it’s not clear whether that will be enough to bolster oil. Goldman Sachs Group Inc. and two consultants said they expect demand to shrink in 2020 for only the fourth time in nearly 40 years.
The U.S. Federal Reserve implemented an emergency half-percentage point interest-rate cut on Tuesday, while Italy said it hasn’t yet decided whether to close schools and universities nationally in an effort to stem the outbreak.
Meanwhile, government data showed that U.S. oil stockpiles rose by 784,000 barrels last week, well below the 3 million barrel forecast by analysts in a Bloomberg survey. U.S. crude oil production hit an all-time high at 13.1 million barrels a day, according to the U.S. Energy Information Administration. The market also got some support from the bigger-than-expected draws in gasoline and diesel stockpiles.
West Texas Intermediate futures for April delivery was little changed at $47.17 a barrel on the New York Mercantile Exchange as of 11:46 a.m. local time. Brent futures for May fell 31 cents to $51.55 a barrel on the ICE Futures Europe exchange.
