Oil prices rebounded this week but remained below the $40 barrier. Brent crude gained to $39.45 per barrel while WTI also rose to $37.14l.
Prices have remained under pressure since crashing to their lowest since early June the previous week.
Meanwhile, markets remained in a state of tension due to the long-running US election counting and the diminishing prospects of a large US stimulus package.
The bearish developments will give OPEC+ producers pause for thought to reconsider output cuts plan when they meet at the end of November to decide how to go forward from Jan. 21.
Global oil markets remain under pressure from escalating concerns about the slow pace of oil demand recovery as the COVID-19 second wave triggers fresh lockdowns worldwide.
The advance of the virus in Europe and North America highlighted the east-west divide in global oil demand recovery as the market received support from the major Asian oil-buying economies led by China.
This split in global oil demand will make it even more challenging for OPEC+ producers as they deliberate over whether to reduce output cuts by 2 million barrels per day from January as originally planned.
OPEC+ will also look at the inventory levels in OECD nations as well as the precipitous decline in refining margin that has let to around half of global refining capacity being idled.
Oil refiners have been closing processing plants in Asia and North America with the focus now turning to Europe. It has led to speculation about whether some will remain closed permanently.
Against such a backdrop the market will be hopeful of a return in demand growth in China and India in the last quarter of the year as the pair prepare for the winter season.
Copyright: Arab News © 2022 All rights reserved.