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Oil Struggles for Direction, Libya Boosts Output

Oil futures traded near unchanged Monday as investors monitored accelerating COVID-19 infections in the U.S. and Europe, while a meeting of an OPEC+ committee will be closely watched by investors for clues to any further steps by major producers on the supply front.

West Texas Intermediate crude for December delivery, the most actively traded contract, was up 1 cent at $41.13 a barrel, at last check, while nearby November crude was flat at $40.88 a barrel on the New York Mercantile Exchange. December Brent crude, the global benchmark, was off 3 cents, or 0.1%, at $42.90 a barrel on ICE Futures Europe.

The OPEC+ Joint Ministerial Monitoring Committee was scheduled to meet virtually on Monday to discuss the alliance’s production curbs. A renewed rise in the COVID-19 cases and a stalling demand recovery has prompted calls for the alliance to scrap their plan of easing output cuts from 7.7 million barrels a day to 5.8 million barrels a day on Jan. 1., said Warren Patterson, global head of commodities at ING, in a note.

But since the JMMC is made up of just a few OPEC+ members, “we will likely have to wait for the full group meetings on the 30 November and 1 December for any concrete decision, though that does not mean that there won’t be plenty of noise around what OPEC+ might do. ”

The global count of confirmed COVID-19 cases climbed above 40 million on Monday, according to data aggregated by Johns Hopkins University, while the death toll rose to 1.1 million. The number of new U.S. infections fell below 50,000, the lowest in nearly a week, as deaths neared 220,000 and moving averages suggested the spread is picking up steam, the Wall Street Journal reported.

Several European countries have moved to increase restrictions on activity as the number of infections have risen.

Meanwhile, Libya, which produced less than 100,000 barrels per day on average between January and September, has increased its production to 500,000 barrels a day and exports to almost 400,000 barrels per day, said Eugen Weinberg, analyst at Commerzbank, in a note. Libya, an OPEC member, isn’t part of the OPEC+ agreement on production curbs.

“Production is also likely to see further dynamic growth when the country’s largest Sharara oil field reopens—currently, 110,000 barrels are being produced there per day, though the oil field has a total capacity of 300,000 barrels per day,” said Weinberg.

Source: Marketwatch