On Monday, oil prices crumbled by around 3% expanding the losses last week on the back of the soaring coronavirus cases in the US and Europe and Libyan output development which raised concerns on both demand and supply.
By 07.55 GMT, Brent crude oil futures slipped by 3% or USD1.25 cents to USD40.52/barrel while the US WTI dropped by 3.2% or USD1.28 cents. Last week, both benchmarks fell by 2.7% and 2.5%, respectively.
Concerns over demand rose as on Saturday, the US reported its new record highest of coronavirus infections and on Sunday, France’s new cases hit a fresh high of more than 50,000.
On the supply side, the report on Friday that Libya’s National Oil Corp. had ended the force majeure on exports from the country’s two major ports. Adding to the tension was the company’s statement that Libya’s output could reach 1 million bpd in four weeks, way quicker than many analysts’ predictions.
Analyst Avtar Sandu of Phillip Futures commented, “The new barrels of Libyan oil came at a time when the crude oil market had just faced the disappointment from the recently concluded OPEC+ ministerial panel when the organization made no new policy proposals.”
Other than that, the Organization of the Petroleum Exporting Countries and its non-member oil producer allies (OPEC+) is also scheduled to rise oil supply by 2 million bpd in January 2021.
Further aggravating the concerns was the rise in US rig count last week, by 5 to 28, the highest since May.
However, according to the US Commodity Futures Trading Commission, investor propped their net long positions in US crude futures and options during the week through October 20.
