Oil Declines After OPEC+ Wagers Market Can Absorb Extra Barrels - Bloomberg

Oil Declines After OPEC+ Wagers Market Can Absorb Extra Barrels - Bloomberg

Oil retreated after OPEC+ decided to ramp up output over the three months to July and figures showed coronavirus infections in India hit a record, highlighting risks to energy demand in one of Asia’s main importers.

West Texas Intermediate fell 0.9%, paring the 3.9% gain seen on Thursday, when the alliance agreed to loosen its supply curbs gradually. The grouping will raise production by more 1 million barrels a day in stages between May and July, and over the same period, Saudi Arabia will roll back its voluntary 1-million-barrel-a-day reduction. Markets were closed on Friday for a holiday.

Crude has staged an impressive rally this year as the roll-out of coronavirus vaccines paves the way for the reopening of key economies, and the decision by the Organization of Petroleum Exporting Countries and its allies was seen as a vote of confidence in the outlook. Reinforcing signs that some top regions are firmly on the mend, the U.S. added more than 900,000 jobs in March. Although that bodes well for oil demand, significant risks -- such as the uptick in Indian cases -- attests to a complex, multi-speed global picture.

Before Thursday’s meeting, the OPEC+ cartel had been expected to maintain its cautious stance by rolling over the cuts that applied to most countries, although Russia had been allowed an increase at the previous gathering. Saudi Energy Minister Prince Abdulaziz bin Salman said OPEC+ was now “testing” the market, and can reverse course if necessary at the next session on April 28.