Oil falls to $39 as OPEC cuts outlook

The international oil benchmark, Brent crude, fell below the $40 per barrel mark on Monday.

This was amid demand worries as the Organisation of the Petroleum Exporting Countries (OPEC) further cut its outlook for demand growth.

OPEC, in its monthly oil market report for September, said the crude oil production by the 13-member cartel increased by 760,000 bpd to an average 24.05 million bpd in August.

“Crude oil output increased mainly in Saudi Arabia, UAE, Kuwait, Algeria and Angola, while production decreased primarily in Iraq,” it said in the report released on Monday.

Brent, against which Nigeria’s crude oil is priced, fell by $0.36 to $39.47 per barrel after the report was released.

OPEC and its allies, known as OPEC+, agreed in April to an output cut to offset a slump in demand and prices caused by the coronavirus crisis.

They decided to cut supply by a record 9.7 million bpd for May and June but the deal was extended in July by one month.

The cuts were later scaled back to 7.7 million bpd from August through the end of the year.
“The impact of COVID-19 related developments on an already fragile global economic conditions remain challenging and will require coordinated global policy action from all market participants.”

OPEC says it sees consumption rising in 2021 by 6.62 million bpd, 370,000 bpd less than expected last month.

Meanwhile, Nigeria’s crude oil production rose slightly to 1.36 million barrels per day in August from 1.35 million bpd in July, according to OPEC.