Oil prices dipped by more than 2% on Monday, extending last week’s losses as surging COVID-19 cases in the U.S and Europe worsened worries about oil demand, just as the possibility of enlarged output weakened sentiment.
Brent crude slipped by $1.21 or 2.90% at $40.56 by 08:52 West Africa Time (WAT). U.S. West Texas Intermediate (WTI) fell by $1.23 cents or 3.09% to $38.62, having fallen more than a dollar not long after trading began.
Brent shed 2.7% last week and WTI declined 2.5%.
Bonny Light, Nigeria’s premium crude grade, dipped by 49 cents or 1.17% to $41.54 a barrel at the last session on Friday. But Qua Iboe, another major national oil grade, edged up by 58 cents or 1.42% to $41.36 per barrel on the same day.
The United States recorded its highest number yet of coronavirus infections in two days through Saturday, just as new cases in France hit a record of over 50,000 on Sunday, depicting the severity of the crisis.
On the supply side, Libya’s National Oil Corp Friday terminated its force majeure on exports from two major ports and declared output would reach a million barrels per day (bpd) within four weeks, a swifter increase than many experts had forecasted.
“New barrels of Libyan oil come at a time when the crude oil market had just faced the disappointment from the recently concluded OPEC+ ministerial panel when the organisation made no new policy proposals,” said Avtar Sandu, senior manager commodities at Phillip Futures in Singapore.
OPEC+, a cartel of producers including the Organisation of the Petroleum Exporting Countries (OPEC) and Russia, is also on track to accelerate output by 2 million bpd in January following a production cut by a record amount earlier this year.
Russian President Vladimir Putin hinted last week he might consent to an extension of OPEC+ oil production reductions.
Oil and gas firms in the U.S. raised their rig count by five to take the total to 287 in the week to 23rd October, the biggest since 23rd October, according to energy services company, Baker Hughes Co. The rig count indicates future supply.
Yet, investors ramped up their net long positions in the United States crude futures and options during the week through 20th October, the U.S. Commodity Futures Trading Commission said on Friday.
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