Oil falls on Libyan output, COVID-19 concerns

NEW YORK — Oil fell nearly 2% on Friday, fi nishing lower for the week, in anticipation of a surge in Libyan crude supply and demand concerns caused by surging coronavirus cases in the United States and Europe.

Crude prices sank after Libya’s National Oil Corp. ( NOC) said it lifted force majeure on exports from key ports and output would reach one million barrels per day ( bpd) in four weeks.

Libya’s NOC has lifted force majeure on exports from the ports of Es Sider and Ras Lanuf, it said on Friday, adding that output would reach 800,000 barrels per day ( bpd) within two weeks and 1 million bpd in four weeks.

Al Waha Oil Co, the NOC company that runs Es Sider, said the port would start operating again on Saturday with the fi rst tanker expected within 48 hours.

Libyan oil output has recovered to about 500,000 bpd since the end of the blockade, far from the 1.6 million bpd it was producing before the country’s civil war.

“As soon as that came out, the market cratered,” said Bob Yawger, director of energy futures at Mizuho in New York.

US crude settled at $39.85 a barrel, falling 79 cents, or 1.9%. Brent crude settled at $41.77 a barrel, losing 69 cents, or 1.6%. For the week, US crude futures lost 2.5% and Brent futures shed 2.7%.

Italy and several US states reported record daily increases in infections, while France extended curfews for about twothirds of its population as the second wave of the COVID-19 (coronavirus disease 2019) pandemic sweeps across Europe.

“What’s holding us back is the uncertainty about demand — when we’re going to get a vaccine, when things are going to get back to normal, concerns about more shutdowns,” said Phil Flynn, senior analyst at Price Futures Group in Chicago.

Russian President Vladimir Putin on Thursday said Moscow did not rule out extending OPEC+ oil output cuts, but that assurance did not offset the expectations for rising Libyan output and demand worries, analysts said. “They need to say, ‘ We are not going to bring back those two million barrels,’” Mr. Yawger said.

OPEC+, which includes Russia and the Organization of the Petroleum Exporting Countries, is due to increase production by two ∞ million bpd in January 2021.

US energy companies added five oil rigs to raise the total rig count to 287 in the week to Oct. 23, the highest since May, energy services fi rm Baker Hughes Co. said. The rig count is an indicator of future supply. —