Oil Down 4% on Worries Over Europe’s Covid-19 Spread, Libya Production

© Reuters.

By Barani Krishnan

Investing.com -  Oil prices slumped more than 4% on Monday on the specter of a new Covid-19 lockdown across Europe and amid worries that a peace pact in Libya could ultimately deliver another million barrels per day to a market already deemed oversupplied.

New York-traded West Texas Intermediate, the key indicator for U.S. crude price, settled down $1.80, or 4.4%, at $39.31 per barrel. 

London-traded Brent crude, the global benchmark for oil, closed the New York trading session down $1.71, or 4%, at $41.44. 

Worries over the coronavirus spiked again on Monday as statistics showed more than 30 million infected people worldwide. British Prime Minister Boris Johnson was pondering a second national lockdown as the U.K. registered over 37,000 deaths from nearly 340,000 cases. Caseloads in Spain and France have also climbed.

In Libya, workers at the major Sharara field have restarted operations, after the National Oil Corporation announced a partial lifting of force majeure, and a Suezmax tanker is making its way to Libya’s Marsa El Hariga terminal, Reuters reported. 

But it was unclear when and at what level production might resume amid a peace deal offered by renegade general Khalifa Haftar to the government in Tripoli.

WTI rose 10% last week and Brent gained 8.3% after Saudi Oil Minister Abdulaziz bin Salman threatened to make life "hell" for oil bears who bet against high crude prices and the OPEC cartel.