On Monday, oil prices edged down on the back of the potential Libyan oil comeback weighing supply glut concern. However, the losses were limited by the expected new tropical storm heading to the US Gulf of Mexico.
By 00.39 GMT, Brent crude oil futures dropped by 0.5% or 20 cents to USD42.95/barrel while the US crude slipped by 0.7% or 27 cents to USD40.84/barrel.
Prices were dragged down by the prospect of the comeback of Libyan oil in the market as on Saturday, Libya’s National Oil Corp (NOC) lifted force majeure on some oil ports and facilities while still imposing the measure in others.
Previously on Friday, eastern Libyan commander, Khalifa Haftar stated that the oil exports blockade would be lifted but did not say if his forces would leave the facilities they control.
This potential raised the worry that the market can ill afford more crude hitting it, moreover when the resurgence in coronavirus cases has prompted several governments to stop the easing of restriction and weighed on demand in Europe and the US.
Britain, for example, has warned about the enforcement of a national lockdown as the country is at a tipping point on the virus cases.
Meanwhile, the expected Tropical Storm Beta is likely to bring a foot of rain to parts of coastal Texas and Louisiana as it moves ashore on Monday night. Anticipating the storm, Royal Dutch Shell Plc. has halted some oil production and began evacuating workers from a US Gulf of Mexico platform.
Over the weekend, oil and gas production had been restarting their offshore operations following the disruption from Hurricane Sally. On Saturday, roughly 17% of the US part of the Gulf offshore oil production along with close to 13% of natural gas output were shut on Sally’s impact.
