As globally resurgent coronavirus cases suppress a promising rebound in fuel demand, Libya’s increased production is contributing to the surplus. Oil prices dropped for the fourth consecutive year on Tuesday as the gloomy weather continued over the oil market.
Brent crude LCOc1 futures fell 32 cents, or 0.8%, to $42.30 a barrel by 0418 GMT, after falling 31 cents on Monday.
West Texas Intermediate (WTI) crude CLc1 futures slid 26 cents, or 0.6%, to $40.57 a barrel, after losing 5 cents on Monday.
COVID-19 cases exceeded 40 million on Monday, and a growing second wave in Europe and North America triggers new restrictions.
While the demand aspect was already weak, supply sentiment was shaken on Monday as Saudi Arabia and Russia refrained from signaling that they would reconsider the planned OPEC + January output increase.
During Monday’s meeting, OPEC and its allies pledged to support the oil market, amid growing concerns about rising infections. For now, OPEC + is stuck to an agreement to reduce production by 7.7 million barrels a day by December, and planning the production cuts to be 5.8 million barrels in January.
Three sources from producing countries said that the planned production increase from January could be reversed if necessary.
Meanwhile, there are those who do not think that the oil markets are in a position to absorb another 2% of the global supply that OPEC + plans to start from January 1, 2021.
OPEC + paktı dışında faaliyet gösteren Libya’nın hızla artan üretimi, arz fazlasıyla ilgili endişeleri artırıyor. Sharara’nın üretimi şu anda kapasitesinin yaklaşık yarısı olan 150.000 varil civarında.
Meanwhile, traders will watch the American Petroleum Institute crude oil and product inventory data on Tuesday. According to surveys, analysts expect US crude oil and distillate inventories to likely be declined over the past week.
There has been a drastic recovery in oil demand since April, now at around 92% of pre-epidemic levels. However, it is too early to announce the end of the period of COVID-19 devastation on oil demand.