Oil selloff pauses, but outlook shaky on surging coronavirus cases, supply woes

TOKYO, Oct 27 (Reuters) - Oil prices regained a semblance of
stability on Tuesday after suffering sharp losses over the
previous session and last week, as a resurgence of coronavirus
cases globally hit prospects for crude demand while increasing
supply also hurt sentiment.
The gloomy backdrop is set to keep prices under pressure
over the coming day.
In early Asia, Brent crude LCOc1 was up 12 cents, or 0.3%,
at $40.58 a barrel by 0039 GMT, having dropped more than 3%
overnight. U.S. oil CLc1 was up 13 cents, or 03%, at $38.69 a
barrel, after also declining more than 3% on Monday.
The lack of progress in striking an agreement for a U.S.
coronavirus relief package added to the general market gloom,
although U.S. House of Representatives Speaker Nancy Pelosi said
on Monday she was hopeful a deal with the White House can be
reached before the Nov. 3 elections.
A wave of coronavirus infections sweeping across the United
States, Russia, France and many other countries has undermined
the global economic outlook, with record numbers of new cases
possibly forcing some countries to impose fresh restrictions as
winter looms. MKTS/GLOB
"The market is under pressure from a toxic brew of no
stimulus, rapidly increasing coronavirus cases, and the surprise
increase of oil production in Libya," Bob Yawger, director of
energy futures at Mizuho Securities.
Prices got some support from the potential drop in U.S.
production as oil companies began shutting offshore rigs with
the approach of a hurricane in the Gulf of Mexico. The worst is over for the crude market, Saudi Arabia's
Energy Minister Prince Abdulaziz bin Salman also said on Monday.
But that contradicted an earlier remark from OPEC's
secretary general, who said any oil market recovery may take
longer than hoped as coronavirus infections rise around the
world. Libyan production is expected to reach 1 million barrels per
day (bpd) in the coming weeks, the country's national oil
company said on Friday, a quicker return than many analysts had
predicted.
That is likely to complicate efforts by the Organization of
the Petroleum Exporting Countries to restrict output to deal
with weak demand.
OPEC+, the producer group and allies including Russia, is
planning to increase production by 2 million bpd from the
beginning of 2021 after record output cuts earlier this year.