Oil Prices Drop By More Than 2% on potential Libyan output return
Oil prices are falling by more than 2% on Monday afternoon amid doubts about the recovery of the global economy and news about the resumption of production of this raw material in Libya, according to trading data.
As of 13.24 GMT, the price of November futures for the North Sea Brent oil mixture fell by 2.04%, to 42.27 dollars per barrel, and the price of November futures for WTI fell by 2.25%, to 40.39 dollars per barrel. The price of October futures for WTI fell by 2.34% to $40.15 per barrel.
Oil traders are afraid of a "second wave" of the new coronavirus spreading, which will inevitably put pressure on the entire world economy, including the demand for raw materials. Many countries are registering an increase in the number of infected, and therefore quarantine measures are tightening.
Pessimism of "bulls" is also caused by the news about the resumption of oil production in Libya, which increases global supply. Thus, the Libyan Oil Company earlier reported that it is lifting the emergency regime at the fields and ports, which allows resuming oil production and export.
The oil market "has faced a fork in terms of pricing, and the way it chooses will largely depend on the progress that Libya will show," Reuters quotes Harry Tchilinguirian, BNP Paribas strategist.
"In the past, Libya has shown that it can successfully restore production to 1 million barrels per day. However, the state of its oil infrastructure poses a problem that must be solved," he explained.