(Bloomberg) — Oil dropped for a second day as operations in the U.S. Gulf of Mexico started to resume following Hurricane Delta and Libya took a major step toward reopening its biggest field.

Futures in New York fell toward $40 a barrel after closing down 1.4% Friday as oil workers in Norway called off a strike. Crude explorers and tugboat operators got back to work on Saturday after Delta, which had seen about 92% of oil production and 62% of gas output shuttered. The hurricane and hopes for more U.S. fiscal stimulus contributed to a price jump of almost 10% last week.

Libya’s National Oil Corp. lifted force majeure on the western deposit of the Sharara field and instructed its operator to resume production, according to a statement on Sunday. Sharara’s output will reach its daily capacity of almost 300,000 barrels in 10 days, a person with knowledge of the situation said.



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Oil Tapering

The resumption of supply from the North African country is an added headache for the OPEC+ alliance as it considers whether to proceed with a plan to restore more output in January. With coronavirus cases accelerating in many countries, the group faces a tough decision at its next policy meeting on Nov. 30-Dec. 1.

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“We have supply coming back to the market, while there is still plenty of concern over demand, with the flaring up in Covid-19 cases in parts of Europe,” said Warren Patterson, head of commodities strategy at ING Bank NV in Singapore. With Libya coming back, the market is close to balance, but it will depend on demand assumptions, he said.

Prices
West Texas Intermediate for November delivery fell 0.8% to $40.28 a barrel on the New York Mercantile Exchange at 10:14 a.m. in SingaporeThe contract rose 9.6% last

(Bloomberg) — Oil fell for a second day as operations in the U.S. Gulf of Mexico started to resume following Hurricane Delta and Libya took a major step toward reopening its biggest field.

Futures in New York dropped below $40 a barrel after closing down 1.4% Friday as oil workers in Norway called off a strike. Crude explorers and tugboat operators got back to work on Saturday after Delta, which had seen about 92% of oil production and 62% of gas output shuttered. The hurricane and hopes for more U.S. fiscal stimulus contributed to a price jump of almost 10% last week.

Libya’s National Oil Corp. lifted force majeure on the western deposit of the Sharara field and instructed its operator to resume production, according to a statement on Sunday. Sharara’s output will reach its daily capacity of almost 300,000 barrels in 10 days, a person with knowledge of the situation said.



graphical user interface: Oil Tapering


© Bloomberg
Oil Tapering

The resumption of supply from the North African country is an added headache for the OPEC+ alliance as it considers whether to proceed with a plan to restore more output in January. With coronavirus cases accelerating in many countries, the group faces a tough decision at its next policy meeting on Nov. 30-Dec. 1.

Video: Hurricane Delta roils oil rigs, squeezes gasoline prices (Fox Business)

Hurricane Delta roils oil rigs, squeezes gasoline prices

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Prices
West Texas Intermediate for November delivery fell 1.5% to $39.99 a barrel on the New York Mercantile Exchange at 8:18 a.m in Singapore.The contract rose 9.6% last week.Brent for December settlement dropped 1.5% to $42.22 on the ICE Futures Europe exchange after declining 1.1% on Friday.

Iraq expects crude prices to remain at around $41 to $42 a barrel this year before rising to $45

U.S. Oil Industry Prioritizes Output Over Debt

Photographer: Angus Mordant/Bloomberg

Oil slipped a second day as operations in the Gulf of Mexico began to resume following Hurricane Delta, Libya stepped up plans to restart production and oil workers in Norway called off a strike.

Futures in New York fell as much as 0.9%, after declining 1.4% on Friday. U.S. Gulf operators are beginning to restart production after the storm made landfall on Friday. Delta’s approach had seen about 92% of oil production and 62% of gas output shuttered.

Libya took a major step toward reviving its battered oil industry by reopening its biggest field. The Sharara field will initially pump 40,000 barrels of crude a day, before reaching its capacity of almost 300,000 barrels in 10 days, a person with knowledge of the situation said.

The resumption of supply from Libya is an added headache for OPEC and its allies as they mull whether to proceed with plans to further taper production curbs in January. With coronavirus cases accelerating in many countries, the cartel faces a difficult decision at its next policy meeting on Nov. 30-Dec. 1 to stay the course or delay the increase in production.

Oil Tapering

OPEC+ created a three phase program of production cuts in response to the plunge in demand brought about by the coronavirus pandemic

Sources: OPEC and Bloomberg News

Prices
  • West Texas Intermediate for November delivery fell 25 cents to $40.35 a barrel on the New York Mercantile Exchange at 9:11 a.m Sydney time.
    • November WTI declined 59 cents to settle Friday at $40.60 a barrel. The contract rose 9.6% last week.
  • Brent for December settlement eased 29 cents to $42.56 a barrel. Dec. Brent lost 49 cents to end Friday’s session at $42.85 a barrel. The benchmark posted a 9.1% weekly gain.

Crude rallied last week