Oil prices dip on sluggish coronavirus recovery

Indian crude imports hit lowest in more than a decade

International benchmark Brent settled 1.22% lower at $44.35 per barrel on Friday, while US gauge West Texas Intermediate closed 1.12% lower at $42.34 per barrel. AP

Oil prices edged lower on Friday but held near a five-month high as an easing of coronavirus lockdowns aided a slow recovery in fuel demand while major crude producers seek to limit supply.

Brent crude dropped 0.1 per cent to trade at $44.63 a barrel, heading for a 0.4 per cent weekly decline.

West Texas Intermediate - the key US gauge - fell 0.8 per cent to $42.49 per barrel but was on track for a weekly gain of about 1.1 per cent.

In another sign of the sluggish nature of recovery, India's crude oil imports fell in July to their lowest since March 2010 amid renewed coronavirus lockdowns and refinery maintenance.

"An imminent return to higher crude demand [in India] remains doubtful," Vienna-based consultancy JBC Energy said in a note.

At the same time, the Opec and allies including Russia were focused on ensuring that members who had overproduced against their commitments would reduce their output.

It was reported that the Opec+ group found that some members would need to cut output by 2.31 million barrels per day to offset their recent oversupply.

Among Opec members, Iraq and Nigeria were the least compliant.

The internal report also flagged demand risks, showing that Opec+ expects oil demand in 2020 to fall by 9.1m bpd, up 100,000 bpd from its previous forecast.

If a prolonged second wave of infections hits China, India, Europe and the US in the second half of the year, 2020 demand could fall by 11.2m bpd, the report added.