Oil falls as COVID-19 cases soar, Libya output jumps

By Sonali Paul
MELBOURNE, Nov 3 (Reuters) - Oil prices slipped on Tuesday
as worries about soaring COVID-19 cases, rapidly rising Libyan
supply and U.S election jitters outweighed growing hopes that
major producers would hold back on planned production increases.
U.S. West Texas Intermediate (WTI) crude CLc1 futures
slipped 6 cents, or 0.2%, to $36.75 a barrel at 0159 GMT, while
Brent crude LCOc1 futures fell 15 cents, or 0.4%, to $38.82.
Italy is the latest country in Europe to tighten COVID-19
restrictions, including limiting travel between the worst-hit
regions and imposing a nightly curfew, which will limit fuel
demand.
"Demand has hit a speed hump as the resurgence in
coronavirus cases around the world has resulted in new
lockdowns," ANZ Research said in a note.
Benchmark prices, down sharply over the past week, had a
brief reprieve on Monday, rising nearly 3% after Russia's oil
minister held talks with domestic oil companies to delay crude
output increases planned for January.
Russian Energy Minister Alexander Novak met with the top
managers of Russian oil companies on Monday to discuss a
possible extension of oil output restrictions into 2021, sources
told Reuters. "The Kremlin has effectively stopped two gaps with one bush
- defend oil prices and effectively intervene in the rouble's
precipitous decline," said Stephen Innes, chief market
strategist at Axi.
The Organization of the Petroleum Exporting Countries (OPEC)
and allies including Russia, a grouping called OPEC+, slashed
oil output from May to support prices and tapered the cut to 7.7
million barrels per day (bpd) in August. They are due to pare
that further by 2 million bpd in January.
But with soaring cases of COVID-19 in Europe and the United
States and the recent swift return of oil supply from Libya
following an eight-month blockade, Saudi Arabia and Russia are
in favour of delaying the output increase in January.
OPEC holds its next full meeting on Nov. 30.
In another bearish sign, seven analysts polled by Reuters
estimated U.S. crude stocks likely rose by about 2 million
barrels in the week to Oct. 30. U.S. inventory data is due from the American Petroleum
Institute on Tuesday and the Energy Information Administration
on Wednesday.