Oil gives up gains even with OPEC deal

Reuters  Oil prices dipped on Thursday, giving back an earlier 10 per cent surge as investors awaited details on a massive OPEC supply-cut agreement in response to the global fuel demand collapse due
to Covid-19 pandemic.

 A global lockdown to slow the spread of coronavirus has cut fuel demand by about 30 per cent, sending oil prices into free-fall. The Organisation of Petroleum Exporting Countries, led by Saudi Arabia, along with allies including Russia - a group known as OPEC+ - were working on Thursday on record oil output curbs of 15 million to 20 million barrels per day (bpd), or 15 per cent to 20 per cent of global supplies, to support prices hammered by the coronavirus crisis, OPEC and Russian sources said.

However, analysts said any agreement between oil producers may not be enough to offset the heavy build in supply due to falling demand, forcing even more production cuts. US gasoline demand has fallen by nearly half since mid-March alone, and other nations have reported similar declines.
SEE ALSO: Oil starts higher on trade optimism
"Until the extreme social distancing/economic shutdown measures are significantly relaxed across North America, Europe and parts of Asia, any OPEC+ supply cuts are simply playing catch up at best," said Roger Read, senior energy analyst at Wells Fargo. Brent futures fell 19 cents to $32.65 a barrel by 1:42 p.m. EDT (1742 GMT), while US West Texas Intermediate crude fell 22 cents to $24.89 a barrel. Thursday, prices jumped more than 10 per cent as OPEC+ appeared to agree to cut output, although details remained unclear.