Oil falls as US, Libyan, Norway supplies return

NEW YORK — Oil prices settled about 3% lower on Monday as force majeure at Libya’s largest oilfield was lifted, a Norwegian strike affecting production ended and US producers began restoring output after Hurricane Delta.

Brent crude settled down $1.13, or 2.6%, to $41.72 a barrel. U.S. West Texas Intermediate ended 2.9%, or $1.17, lower at $39.43.

Production in Libya, a member of the Organization of the Petroleum Exporting Countries ( OPEC), is expected to rise to 355,000 barrels per day ( bpd) after force majeure at the Sharara oilfield was lifted on Sunday.

Rising Libyan output will pose a challenge to OPEC+ — a group comprising OPEC and allies including Russia — and its efforts to curb supply to support prices.

Hurricane Delta, which inflicted the biggest blow in 15 years to energy production in the US Gulf of Mexico last week, was downgraded to a post- tropical cyclone at the weekend.

Workers headed back to production platforms on Sunday and French oil major Total TOTF.PA restarted its 225,500 barrel per day Port Arthur refinery in Texas.

The Louisiana Offshore Oil Port (LOOP) on Monday said it has resumed operations at its offshore Marine Terminal and there are no interruptions in deliveries at the Clovelly Hub.

Front-month prices for both contracts gained more than 9% last week in the biggest weekly rise for Brent since June. But both fell on Friday after Norwegian oil companies struck a deal with labour union officials to end a strike that had threatened to cut the country’s oil and gas output by close to 25%.

Prices were also pressured by a jump in new COVID-19 (coronavirus disease 2019) cases, which has raised the specter of more lockdowns which could dampen demand for oil. Infections are at record levels in the US Midwest. In Europe, British Prime Minister Boris Johnson announced new coronavirus lockdown measures and Italy is preparing fresh nationwide restrictions.

A slow economic recovery from the pandemic threatens to delay a full rebound in world energy demand to 2025, the International Energy Agency ( IEA) said on Tuesday.

In its central scenario, a vaccine and therapeutics could mean the global economy rebounds in 2021 and energy demand recovers by 2023, the IEA, which advises Western governments on energy policy, said in its annual World Energy Outlook.