Russian President Vladimir Putin indicated last week he may agree to extend OPEC+ oil production reductions
Oil fell more than 2% on Monday, extending last week’s losses as growing cases of Covid-19 in the United States and Europe raised worries about crude demand, while the prospect of increased supply also hurt sentiment.
Brent crude was down 89 cents, or 2.1%, at $40.88 by 0647 GMT. US West Texas Intermediate (WTI) dropped 89 cents, or 2.2%, to $38.96, having fallen more than a dollar shortly after the start of trading.
Brent fell 2.7% last week and WTI dropped 2.5%.
The United States reported its highest number yet of new coronavirus infections in two days through Saturday, while in France new cases hit a record of more than 50,000 on Sunday, underlining the severity of the outbreak.
On the supply side, Libya’s National Oil Corp on Friday ended its force majeure on exports from two key ports and said production would reach 1 million barrels per day (bpd) in four weeks, a quicker ramp-up than many analysts had predicted.
“New barrels of Libyan oil come 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,” said Avtar Sandu, senior manager commodities at Phillip Futures in Singapore.
OPEC+, a grouping of producers including the Organization of the Petroleum Exporting Countries (OPEC) and Russia, is also set to increase output by 2 million bpd in January 2021 after cutting production by a record amount earlier this year.
Russian President Vladimir Putin indicated last week he may agree to extend OPEC+ oil production reductions.
In the United States, energy companies increased their rig count by five to take the total to 287 in the week to October 23, the most since May, energy services firm Baker Hughes Co said. The rig count is an indicator of future supply.
Still, investors increased their net long positions in US crude futures and options during the week through October 20, the US Commodity Futures Trading Commision said on Friday.