Oil prices fell on Monday, extending last week’s losses, as increasing Covid-19 cases in the United States and Europe raised worries about energy demand, while Libya's fast growing production also weighed on prices.
Brent was down 99 cents, or 2.37 per cent, at $40.78 by 8.28 pm IST. US West Texas Intermediate (WTI) dropped $1.13, or 2.84 per cent, to $38.72. Both contracts fell almost 2.5% last week.
The rising number of cases "not only highlight the risks posed by immediate transport restrictions, but also dampen long-term demand expectations," said Commerzbank analyst Eugen Weinberg.
On the supply side, Libya’s National Oil Corp (NOC) said it had lifted force majeure on the El-Feel oilfield.
NOC said on Friday Libyan production would reach 1 million barrels per day (bpd) in coming weeks, a quicker ramp-up than many analysts had predicted. “In an environment where there are renewed worries over the demand outlook, the last thing the market needs right now is additional supply,” said Warren Patterson, ING’s head of commodities strategy.
Opec’s secretary general Mohammed Barkindo said Opec+ producers did not expect a renewed oil-price collaspe as seen in the second quarter, and said producers in the Opec+ alliance would continue to “stay the course” in balancing the market. Opec+ is set to increase output by 2 million bpd in January 2021 after cutting production by a record amount earlier this year.