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Hazloc Heaters
Copper Tip Energy
Hazloc Heaters

Oil Drops Further With Libyan Output Set to Rise in Coming Weeks

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These translations are done via Google Translate

By Alex Longley

By Andres Guerra Luz

(Bloomberg) Oil accelerated losses as a further increase in Libyan output threatens to return more supply back to a market that’s already grappling with a pandemic-induced slump in demand.Crude futures fell as much as 2.2% in New York, extending a weekly decline. Libya has lifted force majeure on its Ras Lanuf and Es Sider ports and oil output will surpass 1 million barrels a day in four weeks, according to the state-run National Oil Corp. The announcement comes after warring parties in the North African county signed a permanent cease-fire agreement.

Prices were already edging lower after White House economic director Larry Kudlow said “the ball’s not moving much right now” on talks over another round of virus aid, though House Speaker Nancy Pelosi told MSNBC that a pre-election stimulus bill can still be passed if President Donald Trump cooperates. Meanwhile, the pandemic continues to worsen, with curfews widening in Europe amid fresh outbreaks and the U.S. case count topping 70,000 for the first time since late July.

“The apparent nationwide ceasefire in Libya is only going to encourage more production there and keep it steady, at least for a while,” said John Kilduff, a partner at Again Capital LLC. Meanwhile, “the Covid situation is not really improving, if not getting worse. So we’re continuing to deal with that as well.”

Sky Eye Measurement
Oil falls as return of more Libyan output looms over market

With futures stuck below $40 a barrel, attention is turning to the next major events on the horizon: the U.S. election and an OPEC+ meeting at the end of next month. On Thursday, Russia indicated for the first time that it’s open to delaying an oil-output hike planned for January. At the same time, the unexpected return of Libyan output adds another complicating factor for the group’s next move. Meanwhile, American presidential candidate Joe Biden said fossil fuels need phasing out over time, a comment seized on by Donald Trump as a threat to the industry.

Sky Eye Measurement

“At the moment, there is little that seems to change this playing field for the oil market,” said Hans van Cleef, senior energy economist at ABN Amro. “However, two crucial events — namely the U.S. elections on Nov. 3 as well as the OPEC+ meeting at the end of November — may cause the oil market to move significantly in the coming weeks.”

  • West Texas Intermediate for December delivery declined 79 cents to $39.85 a barrel at 12:33 p.m. in New York
  • Brent for the same month declined 75 cents to $41.71 a barrel

The spread between Brent’s nearest contracts, which had firmed in recent sessions, deepened further into contango as the prompt price fell after the National Oil Corp.’s projected a boost in Libyan output.

Other oil-market news
  • Oil and gas output in Norway, western Europe’s biggest producer, could rise to a record by the middle of the decade as new fields come on stream, according to consultants Rystad Energy AS.
  • Naphtha’s market structure in Asia is sending bearish signals again as some supply returns with refineries lifting operating rates, while the demand recovery remains uneven, according to traders.
  • The number of supertankers signaling China as their destination increased to highest since early August, according to ship-tracking data compiled by Bloomberg.

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