Oil inched up on Monday morning in Asia, with concerns about new supply from reopening Libyan reserves balanced out by news of yet another shutdown on the way for U.S rigs in the Gulf of Mexico, due to Tropical Storm Beta.
inched up 0.05% to $43.17 by 12:38 PM ET (5:38 AM GMT) and inched up 0.05% to $41.34, maintaining their gains of the previous week. The WTI futures contract rolled over to the November contract on September 20.
Libyan commander Khalifa Haftar promised to lift his eight-month blockade of oil exports, prompting Libya’s National Oil Corp to lift the force majeure declaration over ports and facilities where there are no longer any fighters. As yet, it is unclear as to which facilities fit the definition, but the prospect of further supply to an already saturated market is creating downward pressure on prices.
“The market can ill afford more crude hitting the market,” ANZ analysts said in a note on Monday.
Meanwhile, the Gulf of Mexico is bracing for the arrival of Tropical Storm Beta, the third storm storm to hit the area in less than a month following Hurricane Sally during the previous week and Hurricane Laura in late August. Beta is making its way toward the Texas coast, causing delays in the resumption of supply and refining disrupted by Sally. As of last Friday, 17% of U.S. Gulf of Mexico oil production was offline. Tropical Storm Beta is the 23rd named storm of the Atlantic hurricane season, a new record for storm numbers, and also well before the season is deemed to finish on November 30.
The OPEC+ meeting held on September 17 helped nudge prices up to their current levels, with Saudi Energy Minister Prince Abdulaziz bin Salman lambasting both over-quota member states and oil market speculators in a number of fiery statements.
COVID-19 continues to see a rise in the global growth rate, with Europe particularly affected; the U.K. is contemplating a second national lockdown and several E.U. countries have already begun to reinstate preventative measures.
“The resurgence in COVID-19 infections around the world has seen many governments halt the easing of restrictions. This has weighed on demand in Europe and the U.S.,” the ANZ analysts added.