Brent Crude dropped $1.31, or 3.1%, to settle at $40.46 a barrel. WTI Crude fell $1.29, or 3.2%, to settle at $38.56 a barrel. Both contracts fell almost 2.5% last week.
Libya’s National Oil Corp (NOC) on Monday ended force majeure on the remaining facilities closed by an eight-month blockade of oil exports by eastern forces. NOC said on Friday that Libyan production would reach 1 million barrels per day (bpd) in coming weeks, a quicker ramp-up than many analysts had predicted. That could complicate efforts by the Organization of the Petroleum Exporting Countries to restrict supply to cope with lackluster demand. “The last thing the market needs right now is additional supply,” said Warren Patterson, ING’s head of commodities strategy.
OPEC’s secretary general said an oil market recovery may take longer than hoped as coronavirus inflections rise around the world. OPEC+, the producer group and it allies including Russia, is set to increase output by 2 million bpd in January 2021 after a record production cut earlier this year. “OPEC+ must not be careless and have to address the issue of the extra barrels appearing in the market, otherwise the days of relatively stable oil prices will be numbered,” said oil broker PVM’s Tamas Varga.
Meanwhile, the U.S. Gulf Coast energy sector prepared for another storm. Oil producers on Monday were halting offshore production in the Gulf of Mexico as the 27th named storm of the season strengthened and looked likely to threaten the United States as a hurricane.
