(Bloomberg) — Oil was steady around $37 a barrel in New York ahead of an OPEC+ meeting this week that will assess the group’s production cuts as the recovery from virus-driven demand destruction falters.

The rebound has stalled as OPEC+ returns some supply to the market, with prices last week slipping to the lowest since mid-June. A meeting of the Joint Ministerial Monitoring Committee is scheduled for Thursday. OPEC and its allies will hold an online monitoring meeting to assess whether the vast production curbs they’ve been making are still sufficient to stave off an oil glut as the resurgence of coronavirus batters the world economy.

Commodity trader Trafigura Group expects the market to return to surplus, while BP Plc said the relentless growth of oil demand is over and consumption may never return to the levels seen before the pandemic took hold.

Oil has tumbled back below $40 a barrel after staging a comeback from a rout below zero in April, with rising coronavirus infections across major economies raising doubts about a sustained recovery. There is at least a glimmer of hope that a vaccine isn’t far away, “Chinese CDC chief biosafety expert” says the phase III clinical trial went very smoothly that Ordinary Chinese could take the COVID19 vaccine as early as November or December.

“While no one is 100% sure on the course of the economic recovery, OPEC+ is being put in a tough spot as the cartel witnesses the market building a steeper contango ahead of its meeting,” said Stephen Innes, chief global market strategist at AxiCorp. “Optimist’s remain focused on the vaccine cure.”

Compliance with OPEC+ output cuts may be an issue during talks this week after new signs of exporters reneging on the deal, while a widening contango in Brent crude is indicating rising concerns about over-supply. Iraq has cut pricing for all of its crude grades to Asia and the U.S. for October following similar curbs by Saudi Arabia and other Gulf producers as demand stalls.

Trade Recommendation:

Buy the market at $36 – $37

Stop-loss at $35.85

Take Profit_ TP1: at $38 – TP2: $39

 Analyzed by: Mr. Nhim Kosol,Independent Analyst