Oil inches lower as bleaker demand outlook weighs

TOKYO, Sept 15 (Reuters) - Oil prices inched lower on
Tuesday as a bleaker outlook for global fuel demand prompted
fresh selling, but short-covering ahead of a meeting later this
week of OPEC and its allies, known as OPEC+, limited losses.
Brent crude LCOc1 was down 3 cents, or 0.1%, at $39.58 a
barrel by 0102 GMT, reversing earlier gains. U.S. West Texas
Intermediate (WTI) crude futures CLc1 were down 2 cents, or
0.1%, at $37.24 a barrel.
Both contracts ended slightly lower the previous day.
Major oil industry producers and traders are forecasting a
bleak future for worldwide fuel demand, due to the coronavirus
pandemic's ongoing assault on the global economy, with OPEC
downgrading its oil demand forecast on Monday and BP citing
demand might have peaked in 2019.
Worries over an increase in global supply after Libyan
commander Khalifa Haftar committed to ending a months-long
blockade of oil facilities also weighed on sentiment.
"Still, some investors moved to cash in profitable short
positions ahead of the OPEC+ meeting," said Hiroyuki Kikukawa,
general manager of research at Nissan Securities.
"Stronger U.S. stock markets also lent support as
correlation between stock and oil markets has been high lately,"
he said.
Investors look to the joint ministerial monitoring committee
(JMMC) by OPEC+ on Thursday to discuss compliance with deep cuts
in production, although analysts do not expect further
reductions to be made despite Brent prices falling below $40 per
barrel in recent days. U.S. stocks ended sharply higher on Monday as signs of
progress in developing a COVID-19 vaccine and a spurt of
multibillion-dollar deals lifted investor optimism. .N
Concerns over supply disruptions in the United States from
an impending storm also provided some support.
Energy companies, ports and refiners raced on Monday to shut
down as Hurricane Sally grew stronger while lumbering toward the
central U.S. Gulf Coast, the second significant hurricane to
shutter oil and gas activity in the past month.