A day before an OPEC committee meets to review how the oil market is working, oil futures ended lower on Monday, perhaps a sign that investors are nervous about what might come from OPEC.
Prices dropped as some of the major oil-producing countries reportedly are considering a move to ease output curbs because crude demand has improved and some economies reopened from the coronavirus closures.
West Texas Intermediate crude for August delivery fell 45 cents or 1.1% and settled at $40.10 a barrel. The global benchmark September Brent crude lost 52 cents or 1.2% at $42.72 a barrel on ICE Futures Europe.
Still, “July could be a shaky month for oil,” as the “recent surge in coronavirus infection numbers in the U.S. and elsewhere have brought demand risk back into focus,” Stephen Innes, global chief market strategist at AxiCorp, wrote in emailed commentary Monday to MarketWatch.
The possible “easing of OPEC+ production cuts next month after a one-month extension of the initial phase of the production cut plan, and a potential rebound in U.S. production could add pressure on the supply side of the equation,” he said.
The Wall Street Journal on Saturday reported that an alliance of crude producers led by Saudi Arabia was pushing the Organization of the Petroleum Exporting Countries and its allies, collectively known as OPEC+, to ease oil output curbs as planned beginning in August due to signs that demand is returning to normal after cratering in the wake of coronavirus-related lockdowns.
The next monthly meetings for OPEC’s Joint Technical Committee, which provides a review of the oil market and makes recommendations to OPEC+, and the Joint Ministerial Monitoring Committee, which oversees compliance with output cuts, are scheduled for Tuesday and Wednesday, respectively.
Trading of some Oklahoma energy firms also fell including SandRidge Energy where shares dropped 5.34% or 7 cents to settle at $1.24.
Devon Energy fell 2.26% or 23 cents a share before finishing Monday’s trading at $9.96.
ConocoPhillips dropped 3 cents to $39.65 while EOG Resources was down 45 cents or 1% to hit $44.95 a share. Marathon Oil dropped 4.12% or 22 cents and fell to $5.13.
ONEOK was down 13 cents to hit $26.59 while Phillips 66 took a 1.3% drop or 79 cents before ending the day at $60.27 a share.
On the Utilities sector, American Electric Power added 61 cents and finished trading at $84.76.