Singapore — 0258 GMT: Crude oil futures retreated marginally during mid-morning trade in Asia April 5, after the OPEC+ alliance announced its plans late April 1 to gradually taper off production cuts from May to July.
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Register NowAt 10:58 am Singapore time (0258 GMT), the ICE Brent June contract was down 43 cents/b (0.66%) from the April 1 settle to $64.43/b, while the June NYMEX light sweet crude fell 37 cents/b (0.6%) to $61.08/b.
Prior to the meeting, market participants were expecting OPEC+ to rollover production cuts, amid a resurgence of COVID-19 in many countries across the globe, highlighting the fragility of the demand recovery.
In its April 1 meeting, the group decided to add back 350,000 b/day in May, 350,000 b/d in June, and 441,000 in July. Additionally, Saudi Arabia said it will unwind its voluntary 1 million b/d in extra cuts by 250,000 b/d in May, 350,000 b/d in June and 400,000 b/d in July.
Nevertheless, the surprise decision to loosen the taps did not shake investor confidence, as the oil market focused on the broader demand recovery, which had allowed for an increment in oil production.
"Oil prices are reacting sensibly, focusing on the big picture macro view and direction of travel for oil demand, rather than on the surprise decision of OPEC," Stephen Innes, chief global markets strategist at Axi, said in an April 5 note.
The miniscule retraction in oil prices this morning is just noise, with many countries in Asia on holiday April 5, Jeffery Halley, senior Asia Pacific market analyst at OANDA told Platts April 5.
"Oil prices are still rangebound, they may be bouncing, but are still generally moving sideways," he added.
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Crude oil futures slip, in tight range, after OPEC+ plans to taper production cuts - S&P Global
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