Oil prices steady as clouds gather over fuel demand, looser supply curbs

By Sonali Paul
MELBOURNE, July 17 (Reuters) - Oil prices were unchanged on
Friday, with trading marked by growing uncertainty about global
recovery in fuel demand as new COVID-19 cases surge in several
countries just as major producers get set to loosen production
curbs.
U.S. West Texas Intermediate (WTI) crude CLc1 futures rose
1 cent to $40.76 a barrel at 0204 GMT, while Brent crude LCOc1
futures were steady at $43.37 a barrel. Both were still on track
to end the week up slightly.
On Thursday, the United States reported at least 75,000 new
COVID-19 cases, a new daily record. Spain and Australia reported
their steepest daily jumps in more than two months, cases
continued to soar in India and Brazil stepped up lockdown
measures. The two benchmark contracts fell 1% on Thursday after the
Organization of the Petroleum Exporting Countries (OPEC) and
allies, together known as OPEC+, agreed to trim record supply
cuts of 9.7 million barrels per day (bpd) imposed earlier this
year by some 2 million bpd from August.
But actual output additions will be closer to 1.1 million
bpd, as countries like Iraq - which overproduced compared with
their commitments to cut supply in May through July - agreed to
bigger reductions in August and September. Vivek Dhar, commodities analyst at Commonwealth Bank of
Australia, said the market took some heart with the agreement
for some to compensate for previous non-compliance with
commitments at a time when there is uncertainty over demand
growth.
"They're taking those precautions. That gives the market
confidence that OPEC+ is looking quite closely at those
conditions to make sure they don't push the market in the wrong
direction," he said.
Analysts expect the market to remain in the $40-45 a barrel
range, with the looming return of some U.S. supply and
uncertainty over fuel demand as new lockdowns may be needed to
curb the resurgence of COVID-19 cases.
"The problem with the market right now is prices have got to
a level where we're concerned U.S. supply is going to come
back," Dhar said.