The co-spread of the COVID-19 virus is likely to challenge bulls to breach the ল 45.50 / barrel price level in the near term as traders worry about rebalancing the demand / supply of crude oil.
The group, known as OPEC+, warned that rising COVID-19 cases in some countries could curb energy demand despite initial indications of a decline in oil stocks, according to a copy of a report by the group's technical panel seen by Reuters on Thursday.
In addition the hawkish statement by, Saudi Arabia's Prince Abdulaziz bin Salam after the just conclude OPEC+ meeting, sent strong signals to over producing members and most especially targeting crude oil speculators, reminding them there is a new OPEC cop in town.
Royal Dutch Shell Plc halted some oil production and began evacuating workers from a U.S. Gulf of Mexico platform, the company said on Saturday.
The comments by Prince Abdulaziz bin Salman came after a virtual meeting of a key panel of Opec and allies, led by Russian Federation, known as Opec+.
"I do not believe we should expect any material change of course out of the OPEC meeting this week when they review market fundamentals, in part because compliance with previously agreed production cuts has been high", Tim Bray, senior portfolio manager at GuideStone Capital Management, told CNBC via email. "I'm going to make sure whoever gambles on this market will be ouching like hell".
This week, OPEC and the International Energy Agency (IEA) revised down for the second consecutive month their respective demand forecasts for 2020, amid heightened uncertainty over the pandemic and the economic recovery.
He also said that the monitoring panel should discuss the impact of the coronavirus crisis as oil markets have been recovering with difficulty.
Driving the rise was the confident talk from OPEC about compliance with its 7.7 million barrels a day production cut.
West Texas Intermediate crude was down 2.47 percent at $40.30 per barrel, while Brent crude, the London-based worldwide benchmark, slipped 2.22 percent to $42.19 per barrel. OPEC member Libya put out more than 1.2 billion barrels per day until Hifter shut down most of the country's production early this year, according to Bloomberg.
It should be noted that during the past week, Brent crude prices rebounded to trade at $ 43 a barrel, after hitting its lowest level at $ 39 a barrel, as recent economic data published the largest economic inventories that are arbitrarily declining.