Oil prices dropped nearly 3% on Monday as the force majeure in Libya’s oil field was lifted, the Norwegian strike ended, and US producers started production after Hurricane Delta.
Brent crude LCOc1 settled down $1.13, or 2.6%, to $41.72 a barrel. West Texas Intermediate (WTI) CLc1 ended 2.9%, or $1.17, lower at $39.43.
Production in Libya is expected to rise to 355,000 barrels a day (bpd). Rising Libyan production will pose a barrier to OPEC and its allies’ efforts to restrict supply to support prices.
Hurricane Delta, which hit energy production in the US Gulf of Mexico last week, the biggest hit in 15 years, turned into a post-tropical cyclone over the weekend. The workers started to return to the production platforms on Sunday.
Front month prices for both contracts rose more than 9% last week for Brent, the biggest weekly increase since June. However, both fell on Friday after Norwegian oil companies reached a deal with trade union officials.
The bounce in new COVID-19 cases also continues to put pressure on prices, and raising expectations for further lockdowns that could reduce oil demand. Infections are at record levels in the US Midwest region. In Europe, the British Prime Minister announced new coronavirus restriction measures, and Italy is drafting new restrictions across the country.