Oil prices fall after Libya lifts force majeure on some fields

21 September 2020 (Last Updated September 21st, 2020 12:28)

Oil prices have slipped after Libyan commander Khalifa Haftar said his forces would lift the eight-month blockade of oil exports.

Oil prices fall after Libya lifts force majeure on some fields
After being disrupted by Hurricane Sally, energy producers are in the process of restarting their offshore oil and gas operations. Credit: Paul Lowry via Flickr.

Oil prices have slipped after Libyan commander Khalifa Haftar said his forces would lift the eight-month blockade of oil exports.

Furthermore,  rising Covid-19 cases added to the concerns regarding fuel demand.

However, a tropical storm passing towards the US Gulf of Mexico restricted further losses.

Brent crude LCOc1 fell by $0.33, or 0.8%, to reach $42.82 a barrel while US West Texas Intermediate (WTI) CLc1 futures were down by $0.38, or 0.9%, to settle at $40.73 a barrel, Reuters reported.

Operations have restarted at Libya’s Sharara field after National Oil Corporation (NOC) announced a partial lifting of force majeure, the news agency reported, citing two engineers working there.

It is still unclear when production might restart at the Libyan oil facilities.

Reuters quoted ANZ analysts as stating: “The market can ill afford more crude hitting the market.”

According to a Reuters tally, more than 30.78 million people have been infected by the Covid-19, with 954,843 global deaths recorded so far.

OANDA senior market analyst Edward Moya was quoted by the news agency as stating: “It is hard to get excited about a pickup in crude demand as the virus is surging in France, Spain, and the UK, along with concerns the US appears poised for at least one more cycle in the fall and winter.

“Even if energy markets don’t see Libyan production return or if hurricane season eases, oil prices can’t shake off the dwindling demand outlook.”

Meanwhile, oil major Royal Dutch Shell shut some oil production and began evacuating workers from a platform in the US Gulf of Mexico.

After being disrupted by Hurricane Sally, energy producers are in the process of restarting their offshore oil and gas operations over the weekend.

Around 17% of the US Gulf offshore oil production and 13% of natural gas production dropped on 19 September in the wake of Sally’s winds.