Oil prices on Tuesday partially reversed a nearly 3% loss in the previous session after China released robust trade data. However, oil prices remained under pressure as production began to resume in the US Gulf of Mexico, Norwegia, and Libya. At the same time, some US states and European countries were tightening restrictions amid resurging COVID-19 infections. Meanwhile, the International Energy Agency (IEA) projects a 5% drop in the world’s energy demand this year.
China reported exports rose 9.9% year-on-year in September, in line with economists’ estimates for a 10% growth and extending a solid 9.5% expansion in August. Meanwhile, imports surged 13.2% year-on-year last month, compared to a 0.3% increase expected by analysts and a 2.1% slump in the previous month. The country imported 11.8 million bpd of crude last month, up 5.5% from August and 17.5% from September last year.
Shell, BHP, and Chevron are returning workers to their offshore production facilities in the US Gulf of Mexico after Hurricane Delta swept the region. Norwegian workers ended a strike demanding better terms and payment and have been returning to rigs. At the same time, Libya’s National Oil Company lifted force majeure at the country’s Sharara oilfield after being blockaded since January. Libyan output was at 355,000 bpd as of Monday and would likely increase further after Sharara reached its 300,000 bpd capacity.
Some states in the US Midwest, as well as Britain and the Czech Republic, have tightened curbs to fight rising cases of COVID-19. The new infection wave has sparked concerns over fuel demand growth. It also poses a further challenge toOPEC+ producers’ plan to relax their coordinated output cut to 5.8 million bpd in January from 7.7 million bpd currently.
Meanwhile, the IEA said the global economy could rebound in 2021 and energy consumption recovers by 2023 under the central scenario of its annual World Energy Outlook which assumes an available vaccine and therapeutics. Under the delayed scenario, the projected recovery is pushed back by two years.
The international benchmark Brent crude LCOc1 futures gained 12 cents (0.29%) to $41.84/barrel at 0739 GMT, while US WTI crude CLc1 futures edged up 12 cents (0.30%) to $39.55/barrel.
