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Oil edges up, but set to post second monthly fall on virus spread
Oil pumps in operation at an oilfield near central Los Angeles on February 02, 2011. World oil prices recently rallied close to $100 per barrel, as traders absorbed impressive fourth-quarter US economic growth and fretted over worsening political turmoil in Egypt. Most other commodity markets also won support this week from news that the US economic recovery picked up speed in the last three months of 2010, stoking hopes of strengthening demand for raw materials. The US economy grew at its fastest clip in five years in 2010, the Commerce Department reported, as the country bounced back from recession and fears of a double-dip recession ebbed. AFP PHOTO/Mark RALSTON (Photo credit should read MARK RALSTON/AFP/Getty Images)

Oil edges up, but set to post second monthly fall on virus spread

SINGAPORE: Global oil prices edged up on Friday, but are on track for a second monthly fall on growing concerns that the rise in COVID-19 cases in Europe and the United States could hurt fuel consumption.

Brent crude LCOc1 edged up 15 cents to $37.80 a barrel by 0451 GMT after touching a five-month low in the previous session while U.S. West Texas Intermediate (WTI) crude was at $36.27 a barrel, up 10 cents.

“It looks like a dead cat bounce at this stage,” said Jeffrey Halley, senior market analyst, Asia Pacific, OANDA in Singapore.

“With a European slowdown jeopardising global consumption and the return of Libyan production, the onus must now fall on OPEC+ to reconsider their 2 million barrel per day production increases in January.”

He added that oil prices are unlikely to sustain any rally in this environment short of a statement from OPEC+.

The Organization of the Petroleum Exporting Countries and their allies including Russia, a group known as OPEC+, are expected to raise their output by 2 million bpd in January as part of their production agreement.

However, top producers Saudi Arabia and Russia are in favour of maintaining the group’s output reduction of about 7.7 million bpd currently into next year as renewed lockdowns in Europe are threatening to cool demand again.