Oil prices steady amid return of supply, while COVID-19 lockdowns tighten

By Sonali Paul
MELBOURNE, Oct 13 (Reuters) - Oil prices were steady in
early trade on Tuesday, sitting on losses of nearly 3% from the
previous session after supplies began to resume in Norway and
the U.S. Gulf of Mexico and Libya resumed production at its
largest oilfield.
The return of supply comes as resurgent COVID-19 infections
in the U.S. Midwest and Europe raise worries about fuel demand
growth, posing a challenge for the Organization of Petroleum
Exporting Countries and its allies, together called OPEC+.
OPEC+ has curbed supply to help shore up oil prices amid
coronavirus pandemic, with cuts of 7.7 million barrels per day
due to hold through December. The producers' market monitoring
panel is due to meet next Monday.
"It won't be a huge surprise if finally the alliance decides
to address the worsening situation and amend its action," Rystad
Energy's head of oil markets, Bjornar Tonhaugen, said in a note.
U.S. West Texas Intermediate (WTI) crude CLc1 futures
inched up 1 cent to $39.44 a barrel at 0117 GMT, while Brent
crude LCOc1 futures rose 2 cents to $41.74 a barrel.
With workers returning to U.S. Gulf of Mexico platforms
after Hurricane Delta and Norwegian workers returning to rigs
after ending a strike, all eyes were on Libya, a member of the
Organization of the Petroleum Exporting Countries (OPEC), which
on Sunday lifted force majeure at the Sharara oilfield.
The country's total output on Monday was at 355,000 bpd and
will double if the Sharara field gets back to pumping at the
300,000 bpd it was producing before the Libyan National Army
blockaded energy exports in January.
"That would effectively add 0.3% of global oil supply in a
very short time frame," Commonwealth Bank commodities analyst
Vivek Dhar said in a note.
Stoking worries about fuel demand, curbs were being
tightened in Britain and the Czech Republic to battle rising
cases of COVID-19, while French Prime Minister Jean Castex said
he could not rule out local lockdowns.