Oil prices fall on surging COVID-19 cases, oil supplies; Bonny Light gains $0.14

Oil prices dipped on Tuesday amid concerns that a resurgence of COVID-19 infections around the world is impeding fuel demand recovery just as rising Libyan supply adds to already plentiful output.

Brent crude futures dropped by 34 cents or 0.8%, at $42.28 a barrel by 10:03 West Africa Time (WAT) U.S. West Texas Intermediate (WTI) crude futures dipped by 15 cents, or 0.4%, to $40.68.

Bonny Light, Nigeria’s banner crude grade, added 14 cents or 0.33% at $42.10 per barrel on Monday. Qua Iboe, another major national oil grade, slid by 19 cents or 0.46% to $41.33 at 06:31 WAT on Thursday.

Coronavirus cases crossed the 40 million mark on Monday, according to a Reuters tally, with an emerging second wave in Europe and North America triggering various degrees of lockdown measures.

Read also: Oil prices fall after China economic data release; Bonny Light adds $0.47

A Monday meeting of a ministerial committee of the Organisation of the Petroleum Exporting Countries (OPEC) and its allies, a cartel known as OPEC+, vowed to back the oil market as worries mount over escalating coronavirus cases.

OPEC+ is holding on to a pact to rein in supply by 7.7 million barrels per day (bpd) till the end of 2020 and then scaling up output by 2 million bpd in January.

“Monday’s JMMC meeting failed to match market hopes of scrapping the planned output rise in January amidst an increasingly precarious demand environment,” JBC Energy said.

OPEC watchers said a feeble demand prospect could impel OPEC+ to delay the cut in curbs.

“Demand recovery is uneven … Today this process has slowed down because of a second coronavirus wave but has not yet fully reversed,” Russian Energy Minister Alexander Novak told the JMMC meeting.

Libya, which is excluded from the cuts, is increasing supply after armed conflict closed down nearly all of the North African nation’s output in January.

Production at the Sharara oilfield, its biggest, restarted on 11^th October and is now edging close to 150,000 bpd, nearly half its capacity, two industry sources told Reuters.

A further 70,000 bpd oilfield is anticipated to restart on 24^th October.