Oil prices rise after falling amid return of supply

Oil facilities are seen on Lake Maracaibo in Cabimas, Venezuela January 29, 2019. (Reuters)

SULAIMANI (ESTA) — Oil prices rose on Tuesday, as supplies began to resume in Norway, the U.S. Gulf of Mexico and Libya.

Brent crude LCOc1 futures rose 37 cents to $42.09 a barrel at 0627 GMT, while U.S. West Texas Intermediate (WTI) crude CLc1 futures inched up 36 cents to $39.79 a barrel.

Oil prices are under pressure from concerns about the return of supplies, while resurgent COVID-19 infections in the U.S. Midwest and Europe raise worries about fuel demand growth, posing a challenge for OPEC and its allies, together called OPEC+.

With workers returning to U.S. Gulf of Mexico platforms after Hurricane Delta and Norwegian workers returning to rigs after ending a strike, all eyes were on Libya, a member of the Organization of the Petroleum Exporting Countries (OPEC), which on Sunday lifted force majeure at the Sharara oilfield.

Libya’s total output on Monday was at 335,000 barrels per day (bpd). The Sharara field was producing 300,000 bpd of oil before the blockade.

“That would effectively add 0.3% of global oil supply in a very short time frame,” Commonwealth Bank commodities analyst Vivek Dhar said in a note.

OPEC+ has curbed supply to help shore up oil prices amid coronavirus pandemic, with cuts of 7.7 million barrels per day due to hold through December. The producers’ market monitoring panel is due to meet next Monday.

“It won’t be a huge surprise if finally the alliance decides to address the worsening situation and amend its action,” Rystad Energy’s head of oil markets, Bjornar Tonhaugen, said in a note.

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