Oil prices have slipped by 1% as companies in the US started restoring production after Hurricane Delta storm.
The price drop also came after the end of a labour strike that affected Norwegian production.
Brent crude futures for December fell $0.41 to reach $42.44 a barrel, while US West Texas Intermediate (WTI) for November stood at $40.18 per barrel, Reuters reported.
CMC Markets Sydney chief market strategist Michael McCarthy said: “We had good support for both Brent and West Texas on the back of some supply concerns.”
In the US, Hurricane Delta dealt the ‘greatest blow’ to the Gulf of Mexico energy production in 15 years. It was downgraded to a post-tropical cyclone by 11 October.
On 11 October, Gulf of Mexico staff headed back to production platforms. French major Total is in the process of restarting its 225,500 bpd Port Arthur refinery in Texas.
Despite the impact of the storm, oil prices were in and around $40 a barrel over the past few months.
It has encouraged the American energy companies to add oil and natural gas rigs for a straight fourth week last week, according to data released by Baker Hughes.
Meanwhile, production in the Organization of the Petroleum Exporting Countries member Libya is expected to rise to 355,000 bpd after force majeure has been lifted on the Sharara field from 11 October.
According to ING analysts, reports suggest that it would take nearly ten days for output from the Sharara field to reach its 300,000 bpd capacity.
The production from the field is expected to lift Libya’s output back to approximately 600,000 bpd.
Global markets are also increasingly focused on the US Presidential election outcome in November. The upcoming election could alter energy policies in the country.