Oil Prices Fall On Fears Of Oversupply
Oil prices fell more than 1 percent on Monday amid fears of oversupply, as Libya reopened its biggest oilfield, an oil worker strike in Norway ended and U.S. producers began restoring output after Hurricane Delta.
Benchmark Brent crude dropped 54 cents, or 1.3 percent, to $42.31 a barrel while U.S. West Texas Intermediate crude futures were down 60 cents, or 1.4 percent, at $40.04.
Production in Libya is expected to rise to 355,000 barrels per day after force majeure at the Al Sharara oil field located southwestern the country was lifted on Sunday, following an agreement with the Petroleum Facilities Guard (PFG).
Analysts said the likelihood of more Libyan exports will pose a challenge to Opec+ producers and their efforts to curb global supplies at a time of weak demand recovery.
Norwegian oil firms struck a deal with labor union officials on Friday, bringing an end to a strike that threatened to cut the country’s oil and gas output by close to 25 percent.
Meanwhile, U.S. producers began restoring output after Hurricane Delta was downgraded to a post-tropical cyclone at the weekend.
Oil prices are also declining due to concerns that a jump in new covid-19 cases and renewed lockdown restrictions could slow the economic recovery.