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By Sonali Paul
MELBOURNE (Reuters) – Oil prices fell for a fourth day in a row on Tuesday on concerns about a resurgence of coronavirus cases globally stifling a promising recovery in fuel demand, as rising Libyan production adds to to the abundant supply in the market.
Brent crude futures were down 30 cents, or 0.7%, at $ 42.32 a barrel at 0149 GMT, after falling 31 cents on Monday.
US West Texas Intermediate (WTI) crude futures fell 26 cents, or 0.6%, to $ 40.57 a barrel, after losing 5 cents on Monday.
COVID-19 cases topped 40 million on Monday, according to a Reuters tally, and a second rising wave in Europe and North America prompted further drastic measures.
“Since April, we have seen a miraculous recovery in oil demand, which is now at approximately 92% of pre-pandemic levels, but it is too early to declare the end of the era of COVID-19 oil demand destruction. “said Rystad Energy Oil Markets analyst Louise Dickson.
A meeting on Monday of a ministerial panel of the Organization of the Petroleum Exporting Countries (OPEC) and its allies, together called OPEC +, pledged to support the oil market as concerns about rising infections grow.
For now, OPEC + sticks to an agreement to curb production by 7.7 million barrels per day (bpd) through December, and then cut the cuts to 5.7 million bpd in January.
Three sources from producing countries said the planned production increase from January could be reversed if necessary.
“We do not believe that oil markets are in a position to absorb around 2% of global supply that OPEC + is expected to restart as of January 1, 2021,” the Commonwealth Bank commodities analyst said in a note, Vivek Dhar.
He said increased production from Libya, which operates outside of the OPEC + pact, raises concerns about oversupply.
Libya is rapidly increasing production after the armed conflict shut down almost all of the country’s production in January. Output from its largest field, Sharara, which reopened on October 11, is now at around 150,000 bpd, or about half capacity, two industry sources told Reuters.
Meanwhile, traders will keep an eye on crude and product inventory data from the American Petroleum Institute on Tuesday. Analysts expect US crude oil and distillate reserves likely to have fallen in the past week, according to a Reuters poll.
(Reporting by Sonali Paul; Editing by Kenneth Maxwell)
(Business Standard staff may have only modified the title and image of this report; the rest of the content is automatically generated from a syndicated feed.)
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