Oil falls on rising Libya output, coronavirus surge

By Devika Krishna Kumar NEW YORK (Reuters) - Oil prices fell about 2% on Friday, pressured by swelling output from Libya and fears that rising coronavirus infections may slow the recovery in the global economy and fuel demand. Hopes for a vaccine kept crude futures on track for a second straight weekly gain.

Reuters November 14, 2020 00:06:10 IST
Oil falls on rising Libya output, coronavirus surge

Oil falls on rising Libya output coronavirus surge

By Devika Krishna Kumar

NEW YORK (Reuters) - Oil prices fell about 2% on Friday, pressured by swelling output from Libya and fears that rising coronavirus infections may slow the recovery in the global economy and fuel demand.

Hopes for a vaccine kept crude futures on track for a second straight weekly gain.

Brent crude was down 73 cents, or 1.7%, at $42.80 a barrel as of 11:04 a.m. ET (1604 GMT). U.S. West Texas Intermediate (WTI) crude futures fell 88 cents, or 2.1%, to $40.24 a barrel.

For the week, both were headed for a rise of more than 8%.

Libyan oil production has risen to 1.215 million barrels per day (bpd), a Libyan oil source told Reuters, up from the 1.04 million bpd reported on Nov. 7 by the country's National Oil Corp.

Also pressuring prices, U.S. government data showed crude inventories rose by 4.3 million barrels last week. Analysts had expected a draw of 913,000 barrels.

"In essence, some of the feel-good factor from the Pfizer vaccine has worn off and disappointing EIA figures have created a bit of a downward correction," Harry Tchilinguirian, head of commodity research at BNP Paribas, said.

"However, OPEC+ is prepared to tweak its production and we're still waiting for the trial results of other vaccines that may be easier to distribute since they won't need such cold storage."

New coronavirus infections in the United States and elsewhere are at record levels and tightening restrictions should lead to fuel demand recovering more slowly than many had hoped.

WTI and Brent contracts jumped this week after data showed an experimental COVID-19 vaccine being developed by Pfizer Inc and Germany's BioNTech was 90% effective. But on Thursday, the International Energy Agency (IEA) said global oil demand was unlikely to get a significant boost from vaccines until well into 2021.

"It's no surprise that the market is trimming the price gains today as realities for crude supply and demand are grim, while daily new Covid-19 cases in the U.S. are setting new records for the third-straight day," Bjornar Tonhaugen, head of oil markets at Rystad, said.

"Our crude and liquids balances suggest oil prices need to go lower before they go higher."

Analysts say tougher restrictions on mobility to deal with sky-rocketing coronavirus cases mean the Organization of the Petroleum Exporting Countries (OPEC) and its allies, known as OPEC+, may hesitate to loosen output curbs as planned in January.

OPEC+ is due to hold a Joint Ministerial Monitoring Committee next week, which will give some indications of what the producers may decide at the next ministerial meeting on Dec. 1.

Algeria's energy minister said this week that OPEC+ could extend the group's current oil production cuts into 2021 or deepen them further if required.

(Reporting by Julia Payne and Yuka Obayashi; Editing by Tom Hogue, Barbara Lewis, Emelia Sithole-Matarise and David Gregorio)

This story has not been edited by Firstpost staff and is generated by auto-feed.

Updated Date:

TAGS:

also read

France, Germany to agree to NATO role against Islamic State - sources
| Reuters
World

France, Germany to agree to NATO role against Islamic State - sources | Reuters

By Robin Emmott and John Irish | BRUSSELS/PARIS BRUSSELS/PARIS France and Germany will agree to a U.S. plan for NATO to take a bigger role in the fight against Islamic militants at a meeting with President Donald Trump on Thursday, but insist the move is purely symbolic, four senior European diplomats said.The decision to allow the North Atlantic Treaty Organization to join the coalition against Islamic State in Syria and Iraq follows weeks of pressure on the two allies, who are wary of NATO confronting Russia in Syria and of alienating Arab countries who see NATO as pushing a pro-Western agenda."NATO as an institution will join the coalition," said one senior diplomat involved in the discussions. "The question is whether this just a symbolic gesture to the United States

China's Xi says navy should become world class
| Reuters
World

China's Xi says navy should become world class | Reuters

BEIJING Chinese President Xi Jinping on Wednesday called for greater efforts to make the country's navy a world class one, strong in operations on, below and above the surface, as it steps up its ability to project power far from its shores.China's navy has taken an increasingly prominent role in recent months, with a rising star admiral taking command, its first aircraft carrier sailing around self-ruled Taiwan and a new aircraft carrier launched last month.With President Donald Trump promising a US shipbuilding spree and unnerving Beijing with his unpredictable approach on hot button issues including Taiwan and the South and East China Seas, China is pushing to narrow the gap with the U.S. Navy.Inspecting navy headquarters, Xi said the navy should "aim for the top ranks in the world", the Defence Ministry said in a statement about his visit."Building a strong and modern navy is an important mark of a top ranking global military," the ministry paraphrased Xi as saying.