Oil is Falling as COVID-19 May Force Russia to Support Extended Production Cuts

Oil prices declined on Friday but held onto most of the gains they made in the previous session after Russian President Vladimir Putin indicated that he was ready to extend record cuts to supplies at a time when Covid-19 cases rose in the United States and Europe.

Brent crude fell 24 cents, or 0.6%, to $ 42.22 a barrel before the opening of European markets, after rising 1.7% on Thursday, while US crude fell 28 cents, or 0.7%, to $ 40.36 a barrel after it had gained 1.5% in the previous session. The two benchmarks are on track to make their first weekly loss in three weeks.

The final debate between US President Donald Trump and his Democratic rival, Joe Biden, did not have a tangible effect on prices immediately, although the latter’s clean energy plans shed light on oil companies and stocks.

Prices began to slide later in the session after holding steady for most of the Asian session and during the debate.

Putin said on Thursday that Russia does not see a need to change an agreement between major oil producers on reducing global supplies, but he did not rule out extending oil production cuts if market conditions justify this.

Putin’s statements are the clearest yet from Russia, one of the world’s largest oil producers, on its willingness to continue unprecedented production cuts in the face of declining demand caused by the Coronavirus pandemic and glut of production.