Fear of pandemic and situation in Libya weigh on oil

Brent ends on a decline of 1.3% to $ 41.15 and WTI ends on a loss of 1.1% to $ 39.27.

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Oil prices fell Tuesday, dragged down by investor concerns over the coronavirus crisis and the prospect of a return to the Libyan production market.

Brent North Sea crude for August delivery, the last trading day, ended at 41.15 dollars in London, down 1.3% or 56 cents from the close of Monday.

In New York, US barrels of WTI for the same month lost 1.1% or 43 cents to 39.27 dollars.

Crude prices “level off due to growing concerns over the current control of the Covid-19 epidemic and a possible second wave,” said Tamas Varga, analyst at PVM.

The COVID-19 pandemic, which has just crossed two symbolic thresholds – more than half a million dead and ten million cases – “is far from over” and even “accelerating”, warned Monday l ‘World Health Organization, calling on the world to mobilize without waiting for a vaccine.

“The current price of oil is a kind of interesting + no man’s land,” said Louise Dixon of Rystad Energy, allowing investors “to wait for new data, especially on the demand side”.

The latter are also attentive to the situation in Libya, say several analysts, while the situation in the country returns to the heart of diplomatic discussions.

Libya saw its oil production drop at the start of the year due to the blockage of its most important oil fields and terminals by groups allied with Marshal Khalifa Haftar, a strongman in eastern Libya.

However, his opponents of the Government of National Unity (GNA), recognized by the United Nations, have recently garnered important victories. French President Emmanuel Macron also said on Monday that “France does not support Marshal Haftar”.

Libyan production had gone in a few weeks from more than a million barrels per day – average last year – to less than 100,000, according to data from the Organization of the Petroleum Exporting Countries (OPEC) of which Libya makes part.

If it were to return to the market, such a quantity could upset the fragile balance between supply and demand that the cartel and its allies, including Russia, are trying to maintain with great reinforcement of cuts in their production, an agreement from which Libya is exempt.

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