Total
Total (TOTF.PA) has called off plans to acquire Occidental Petroleum’s assets in Ghana, the French energy company said on Monday citing unfriendly market environment occasioned by Covid-19 pandemic.
“Given the extraordinary market environment and the lack of visibility that the group faces…Total has decided not to pursue the completion of the purchase of the Ghana assets,” Total said in a statement.
Total may have been strongly dissuaded by the low fortunes occasioned by drop in oil prices. Recently, potential OPEC+ plans to deepen supply cuts were overshadowed by demand concerns exacerbated by a possible second wave of coronavirus infections as countries ease lockdowns.
Brent crude LCOc1 dropped 56 cents, or 1.9 per cent, to $29.42 a barrel by 0855 GMT, having risen 1.2 per cent last week.
West Texas Intermediate crude futures fell 23 cents, or 0.9 per cent, to $25.55 after gaining 6.8 per cent in the previous session.
“Fears are running rife that easing lockdown measures will trigger a second wave of coronavirus infections,’’ said Stephen Brennoc at oil brokerage PVM.
The U.S. infectious disease expert, Anthony Fauci, last Tuesday told the Congress that easing coronavirus lockdowns could set off new outbreaks of the COVID-19 disease that has killed over 80,000 Americans and badly damaged the world’s biggest economy and oil consumer.
New outbreaks have been reported in South Korea and China, where the health crisis started before spreading across the globe, prompting governments to lock down billions of people, devastating economies and demand for oil.
The U.S. Energy Information Administration (EIA) now expects world oil demand to fall by 8.1 million barrels per day (bpd) this year to 92.6 million bpd, compared with a previous forecast for a drop of 5.2 million bpd.
The agency also expects the U.S. output to fall by 540,000 bpd, against a previous forecast of 470,000 bpd.
It expects global output of 11.7 million bpd this year and 10.9 million bpd in 2021.
On the supply side, OPEC+ is looking to maintain existing cuts beyond June, when it meets next in Vienna, sources told Reuters.
