Oil futures settled lower Monday, with U.S. prices down by more than 4%, as the market braced for the return of crude output from Libya following reports that Libyan military commander Khalifa Haftar will lift an eight-month blockage of crude exports that had shut nearly all of the country’s production.
Concerns over the possibility of more COVID-19 shutdowns and weaker energy demand also weighed on prices reported MarketWatch.
West Texas Intermediate crude for October delivery fell $1.80, or 4.4%, to settle at $39.31 a barrel on the New York Mercantile Exchange, ahead of the contract’s expiration at the end of Tuesday’s session. Global benchmark, November Brent crude shed $1.71, or 4%, to $41.44 a barrel on ICE Futures Europe.
“Oil prices are lower on turmoil, whether it be from mother nature or politics,” said Phil Flynn, senior market analyst at The Price Futures Group.
The return of Libya oil is weighing on prices, along with fears of more COVID-19 shutdowns, while concerns over “increasing political divides after the death of Supreme Court Justice Ruth Bader Ginsburg reduces the odds that the U.S. will get much-needed coronavirus relief,” he said in a note.
“Even mother nature is creating problems for oil,” he said. Tropical Storm Beta is forecast to move toward the central coast of Texas and inland by late Monday, according to a morning update from the National Hurricane Center. The Gulf of Mexico region is still recovering from back-to-back hurricanes, following Hurricane Laura in late August and Hurricane Sally last week. As of Monday 8.36% of the region’s oil production remained shut in, along with 5.98% of natural-gas output, according to the Bureau of Safety and Environmental Enforcement.