Production cartel Opec and Russia are expected to meet today to discuss the oil cuts, however experts warned that prices may fall.
According to the details, members of both sides, widely expected to stick with their previously agreed plan to scale back production cuts to 7.7 million barrels per day (bpd) at the end of this month, from 9.7m bpd in tandem with recovering global demand.
However, the surge in COVID-19 cases in the United States of America is casting dark shadows on the deal.
Experts have warned oil prices may fall from their current level – just over $43 per barrel for benchmark Brent crude.
Experts added that:
“While a spike in new Covid-19 cases in the United States could impact domestic demand in the short term, the combination of increased global oil demand and the ongoing commitment of Opec+ (the 13 member Opec group plus 10 other major exporters led by Russia) to manage supply, continues to have a positive impact on the oil price sentiment.
On Tuesday, U.S crude futures fell 2% to $39.23 per barrel and Brent futures fell 1.8% to $41.94 per barrel.
Asian Market Situation
MSCI’s broadest index of Asia-Pacific shares outside Japan fell 1.2%.
Japan’s Nikkei retreated from a one-month high touched on Monday, dropping 0.8%.
A firm dollar put pressure on the Aussie and kiwi.
Furthermore S&P 500 futures were flat in Asia after the index lost 0.9% on Monday.
The Donald Trump Administration speculating on scrapping a 2013 auditing agreement that could augur a broader crackdown on US-listed Chinese firms, as friction between the world’s two largest economies generates heat on a broader front.