Oil prices fall as supply concerns ease
From Bozorgmehr Sharafedin
LONDON (Reuters) - Oil prices fell on Monday as force majeure was lifted on Libya's largest oil field, a Norwegian strike that affected production ended and US producers began restoring production after the Hurricane Delta.
Brent crude fell 41 cents to $ 42.44 a barrel by 0650 GMT and US West Texas Intermediate to $ 40.18, a drop of 42 cents.
"It's about ending production disruptions ... (which) are not helpful at a time of persistent demand concerns," said UBS oil analyst Giovanni Staunovo.
Production in Libya, a member of the Organization of Petroleum Exporting Countries (OPEC), is expected to rise to 355,000 barrels per day (bpd) after force majeure was lifted on the Sharara oil field on Sunday.
Soaring Libyan production will pose a challenge to OPEC + producers and their efforts to stem supply to support prices.
"If the recovery in oil demand continues to struggle due to new or more stringent COVID-related mitigation measures, the (OPEC +) producer community may need to reconsider the proposed reduction in its voluntary supply cuts," said Harry Tchilinguirian, analyst at BNP Paribas.
The previous month's prices for both contracts rose more than 9% last week, the largest weekly increase for Brent since June. However, both fell Friday after Norwegian oil companies signed a deal with union officials and ended a strike that threatened to cut the country's oil and gas production by nearly 25%.
Hurricane Delta, which dealt the biggest blow to power generation in the US Gulf of Mexico in 15 years, was downgraded to a post-tropical cyclone over the weekend.
Workers returned to the production platforms on Sunday and Total SA worked to get the Port Arthur, Texas refinery back on stream at 225,500 barrels a day.
Prices have also come under pressure from a jump in new COVID-19 cases that have sparked the specter of further lockdowns.
Infections in the US Midwest are at record levels and in the UK Prime Minister Boris Johnson is expected to announce new measures on Monday while Italy prepares new nationwide restrictions.
Meanwhile, Goldman Sachs said the US election result would not affect the bullish outlook for oil and natural gas, and that an overwhelming Democratic victory could be a positive catalyst for those sectors.
(Reporting by Bozorgmehr Sharafedin in London; additional reporting by Florence Tan in Singapore; editing by Jason Neely)
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