By Adam Claringbull
Investing.com – Oil was slightly up Friday morning in Asia, even as Gulf of Mexico rigs reopened after Hurricane Sally. Thursday’s OPEC+ meeting warning its overproducing members contributed to the rise.
Brent oil futures gained 0.46% to $43.50 by 11:33 PM ET (4:33 AM GMT) and WTI futures were up 0.39% to $41.13. Both benchmarks remained above the $40-mark.
Oil rigs in the Gulf of Mexico are coming back on stream in the aftermath of Hurricane Sally, as are U.S. refineries in the area. However, this leads to further concern about oversupply in the industry, given the current low global demand. “Now the storm has passed, we should start to see this production coming back online,” ING Research said in a note.
U.S. distillates oversupply is also cause for concern with the U.S. Energy Information Administration (EIA) reporting a 3.461 million-barrel surplus, as against the 0.6 million forecast.
Balancing this downward pressure was yesterday’s OPEC+ Joint Ministerial Monitoring Committee (JMMC) meeting, where members agreed to adhere to the 7.7 million barrels per day (bpd) production cuts agreed to in July. Saudi Energy Minister Prince Abdulaziz bin Salman gave an unusually strong warning to both overproducing members (the UAE in particular) and oil price speculators.
“Using tactics to over-produce and hide non-compliance have been tried many times in the past, and always end in failure,” Prince Abdulaziz said at the opening session of the OPEC+ committee that monitors the output cuts. “They achieve nothing and bring harm to our reputation and credibility.” Bloomberg reported, along with this broadside delivered to speculators: “We will never leave this market unattended,” he said. “I want the guys in the trading floors to be as jumpy as possible. I’m going to make sure whoever gambles on this market will be ouching like hell.”
The COVID-19 pandemic continues to keep demand low, with global confirmed cases now topping 30 million as of Sept 18, according to John Hopkins University data.