By Sonali Paul

MELBOURNE (Reuters) – Oil prices were steady in early trade on Tuesday, sitting on losses of nearly 3% from the previous session after supplies began to resume in Norway and the U.S. Gulf of Mexico and Libya resumed production at its largest oilfield.

The return of supply comes as resurgent COVID-19 infections in the U.S. Midwest and Europe raise worries about fuel demand growth, posing a challenge for the Organization of Petroleum Exporting Countries and its allies, together called OPEC+.

OPEC+ has curbed supply to help shore up oil prices amid coronavirus pandemic, with cuts of 7.7 million barrels per day due to hold through December. The producers’ market monitoring panel is due to meet next Monday.

“It won’t be a huge surprise if finally the alliance decides to address the worsening situation and amend its action,” Rystad Energy’s head of oil markets, Bjornar Tonhaugen, said in a note.

U.S. West Texas Intermediate (WTI) crude <CLc1> futures inched up 1 cent to $39.44 a barrel at 0117 GMT, while Brent crude <LCOc1> futures rose 2 cents to $41.74 a barrel.

With workers returning to U.S. Gulf of Mexico platforms after Hurricane Delta and Norwegian workers returning to rigs after ending a strike, all eyes were on Libya, a member of the Organization of the Petroleum Exporting Countries (OPEC), which on Sunday lifted force majeure at the Sharara oilfield.

The country’s total output on Monday was at 355,000 bpd and will double if the Sharara field gets back to pumping at the 300,000 bpd it was producing before the Libyan National Army blockaded energy exports in January.

“That would effectively add 0.3% of global oil supply in a very short time frame,” Commonwealth Bank commodities analyst Vivek Dhar said in a note.

Stoking worries about fuel demand, curbs

(Bloomberg) — Oil dropped the most in more than a week with Gulf of Mexico production starting to resume and Libya reopening its biggest field.

Loading...

Load Error

Futures in New York declined 2.9%, falling to its lowest in a week and breaching its 100-day moving average in a sign of further selling pressure ahead. Global benchmark Brent futures settled below both its 100-day and 200-day moving averages.

A string of supply disruptions that have supported prices subsided. Royal Dutch Shell Plc, BHP Group and Chevron Corp said they have begun resuming operations at Gulf of Mexico platforms. Earlier, Libya’s National Oil Corp. lifted force majeure on the nation’s largest field, which will reach its daily capacity of almost 300,000 barrels in 10 days, a person with knowledge of the situation said.

“Delta was mostly priced in last week on the high side,” said Michael Lynch, president of Strategic Energy & Economic Research. “People are taking the profits now that it has moved on.”



graphical user interface, chart: Brent settles below key technical levels as supply disruptions abate


© Bloomberg
Brent settles below key technical levels as supply disruptions abate

Along with supply disruptions easing in the U.S. and Libya, the cancellation of a workers’ strike in Norway is returning more output to a market facing anemic demand due to the pandemic. U.K. Prime Minister Boris Johnson will tighten restrictions as infections rise, while Italy and the Netherlands are also considering new measures. Meanwhile, the Organization of Petroleum Exporting Countries and its allies are mulling whether to proceed with a plan to restore more output in January.

“They look at the balances as carefully as anybody else, and they’re looking at what the demand picture is,” said Andrew Lebow, senior partner at Commodity Research Group. “It’s highly unlikely that they’re going to pursue a tapering strategy. If anything, they might talk about having to reduce

(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.



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.

Loading...

Load Error

“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

UP NEXT

UP NEXT

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