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Oil prices dip over Libya’s supply restart prospect; Bonny Light up by 0.28%

Oil prices depressed on Monday, hurt by a potential restart of Libyan production just as surging COVID-19 cases set nerves on edge regarding world’s crude demand even though trade was boosted by a tropical storm that put production in the Gulf of Mexico in limbo.

Brent crude declined by $0.99 or 2.29% at $42.16 a barrel by 13:38 West African Time, while U.S. West Texas Intermediate was down by $1.01 cents, or 2.46%, to $40.10 a barrel.

At the last trading session, Bonny Light, Nigeria’s banner oil grade, jumped by 12 cents or 0.28% to $42.60 per barrel just as Qua Iboe, another key crude grade, drifted higher by $2.08 or 5.11% to $42.78.

The crew at Libya’s Sharara field is back to work, two engineers employed there said, after the National Oil Corporation declared a limited removal of force majeure.

It remains vague, nevertheless, the time production will resume and what volume it will allow.

“In the past, Libya has proven relatively adept… in bringing back production to circa 1 million bpd. However, the state of its oil infrastructure is a challenge to overcome,” said BNP Paribas’ Harry Tchilinguirian.

“(The) oil market is facing a fork in the road this week when it comes to pricing, and which option it chooses to travel will largely depend on how much real progress will come about in Libya.”

Read also: Oil prices jump after Saudi’s quota compliance push, Bonny Light up by 4.30%

Goldman Sachs maintained its prediction for Brent to touch $49 a barrel by the end of 2020 and $65 by next September in spite of the Libyan developments.

Upbeat sentiments are bolstered by the expectation of higher conformity to an output cut deal among the Organisation of the Petroleum Exporting Countries (OPEC) members and its Russia-led allies.

Yet an uptick in coronavirus cases might hobble demand.

Over 30.78 million persons have contracted the coronavirus, a Reuters tally reveals, and Prime Minister Boris Johnson in Britain was on Monday nursing a plan to put back lockdown curbs while infections in France and Spain have leapt also.

Providing a floor for prices, U.S. tropical Storm Beta, the 23rd rOil prices eported storm of the 2020 Atlantic hurricane season, swept onshore, putting production at risk.

Ronald Adamolekun

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Ronald Adamolekun

Ronald Adamolekun is a creative writer with a mixed bag of experience in fields as diverse as data journalism, financial reporting and editing.

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