- Oil fell about 2% on Libyan output, COVID-19 demand concerns.
- Oil fell nearly 2% on Friday, finishing lower for the week, in anticipation of a surge in Libyan crude supply and demand concerns caused by surging coronavirus cases in the United States and Europe.
- A surge in new COVD-19 cases in the US and Europe leads to a fall in oil prices.
Crude prices sank after Libya’s National Oil Corp (NOC) said it lifted force majeure on exports from key ports and output would reach 1 million barrels per day in four weeks, says an article published by Hellenic Shipping News.
Uncertainty of demand
U.S. crude CLc1 settled at $39.85 a barrel, falling 79 cents, or 1.9%. Brent crude LCOc1 settled at $41.77 a barrel, losing 69 cents, or 1.6%. For the week, U.S. crude futures lost 2.5% and Brent futures shed 2.7%.
“What’s holding us back is the uncertainty about demand – when we’re going to get a vaccine when things are going to get back to normal, concerns about more shutdowns,” said Phil Flynn, senior analyst at Price Futures Group in Chicago.
Russian President Vladimir Putin on Thursday said Moscow did not rule out extending OPEC+ oil output cuts, but that assurance did not offset the expectations for rising Libyan output and demand worries, analysts said.
“They need to say, ‘We are not going to bring back those two million barrels,’” Yawger said.
OPEC+, which includes Russia and the Organization of the Petroleum Exporting Countries, is due to increase production by 2 million bpd in January 2021.
U.S. energy companies added five oil rigs to raise the total rig count to 287 in the week to Oct. 23, the highest since May, energy services firm Baker Hughes Co said. The rig count is an indicator of future supply.
Oil Market today
Asian shares got the week off to a hesitant start on Monday as surging coronavirus cases in Europe and the United States undermined the global outlook, while China’s leaders meet to ponder the future of the economic giant.
The surge in new COVID-19 cases combined with no clear progress on a U.S. stimulus package to pull S&P 500 futures down 0.6%. EUROSTOXX 50 futures eased 0.7% and FTSE futures 0.4%.
MSCI’s broadest index of Asia-Pacific shares outside Japan inched up 0.1%, still short of its recent 31-month peak. Japan’s Nikkei dithered either side of steady, and South Korea’s main index lost 0.3%.
Chinese blue chips shed 0.5% as the country’s leaders met to chart the nation’s economic course for 2021-2025, balancing growth with reforms amid an uncertain global outlook and deepening tensions with the United States.
A packed week for monetary policy sees three major central banks hold meetings. The Bank of Canada and Bank of Japan are expected to hold fire for now, while the market assumes the European Central Bank will sound cautious on inflation and growth even if they skip a further easing.
Oil prices fell further in anticipation of a surge in Libyan crude supply and demand concerns caused by surging coronavirus cases in the United States and Europe.
Brent crude futures lost 73 cents to $41.04 a barrel, while U.S. crude also fell 73 cents to $39.12.
Oil Future close 23rd October 2020
Brent crude: $ 41.77 (-0.69) /brl FM delivery Dec (FM=Front Month)
Light crude (WTI): $ 39.85 (-0.79)/brl FM delivery Dec
Gasoil ARA: $ 335.00 (-1.25) /mton FM delivery Nov
NY Harbor Ulsd: $ 354.44 (-2.89) /mton FM delivery Nov
Oil Futures trading at GMT 06.06; Brent: $-0.82, WTI: $-0.80.
Expect Fuel Oil prices to drop 4 – 6 usd/mton.
( Fuel Oil, means 380 HS plus VLSFO together ).
MGO and NY Harbor Ulsd to drop 1 – 3 usd/mton. All prices based
on Oil Future close Friday evening.
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Source: MABUX
