Oil Price Steadies, Saudi Arabia May Push for OPEC Cuts

Oil declined as Libya signaled the resumption of some crude exports while surging coronavirus cases cloud the outlook for demand. Futures in New York fell 2.2% to near $40 a barrel. Libya is moving closer to reopening its battered oil industry after it told companies to resume production at some fields that are free of foreign mercenaries and fighters. This will add to already rising supply from OPEC+ nations, and comes as virus infections are starting to rise again in many places around the world.

The U.K. said it’s close to a “tipping point” with the public health crisis, while there were predictions of at least one more virus cycle in America. Money managers have cut their bullish bets on Brent crude to the lowest in five months.

Long positions on Brent falling even as prices rise

U.S. crude jumped 10% last week after a show of determination by Saudi Arabia, the most influential Organization of Petroleum Exporting Countries member, to defend the market. The Saudis hinted they’re prepared for new output cuts, and lambasted OPEC+ nations that have cheated on quotas. Demand and supply worries have returned for investors at the start of this week.

“I think we’ve seen the best of the oil rally and it will struggle to make any substantial gains from now,” said Jeffrey Halley, a senior market analyst for Asia Pacific at Oanda Corp. “More lockdowns in Europe and the return of some Libyan production is weighing on sentiment.”

PRICES
West Texas Intermediate for October fell 91 cents to $40.20 a barrel as of 8:58 a.m. London time Brent for November dropped 81 cents, or 1.9%, to $42.34

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