Crude oil futures fell below $40 to finish the trading week, continuing the pattern for the last several sessions of seesawing around the $40 mark. The fundamentals have come under the spotlight, with resurgence in coronavirus cases also weighing on the energy sector.
December West Texas Intermediate (WTI) crude futures tumbled $0.82, or 2.02%, to $39.82 per barrel at 19:29 GMT on Friday on the New York Mercantile Exchange. US crude prices are poised for a weekly loss of about 2.3%, raising their year-to-date decline to 35%.
Brent, the international benchmark for oil prices, traded relatively flat at the end of the trading week. December Brent crude futures dipped $0.03, or 0.07%, to $41.74 a barrel on London’s ICE Futures exchange. Brent is on track for an even worse weekly loss of 2.6%, adding to its 2020 drop of 37%.
On Friday, the Baker Hughes oil rig count clocked in at 211 in the week ending October 23, up from 205 in the previous week. This is the second consecutive week that the number of crude oil rigs topped 200. The last time it was this high was in June.
The Baker Hughes total rig count reached 287.
National Oil Corporation, Libya’s state-owned oil and gas company, announced that it removed force majeure on its shipping commitments from two key ports – Es Sider and Ras Lanuf. This is an important development because it means those parts can meet their contractual obligations pertaining to oil exports. As a result, market analysts believe the nation’s exports could top one million barrels per day over the next month, adding to an oversupplied market.
This week, Libya’s crude production hit 560,000 barrels per day, up from 150,000 last month. This is the result of the country’s warring sides reaching a permanent ceasefire in every part of Libya.
Indeed, Libya’s recent developments could add to global supply woes, particularly since Tripoli is exempt from the output cuts by the Organization of the Petroleum Exporting Countries (OPEC) and their allies, OPEC+.
As more supply comes to market, investors do not think there is enough demand, especially in the United States. The White House and the Democratic Congress failed to, once again, agree to a coronavirus stimulus and relief package.
In other energy commodities, November natural gas futures shed $0.038, or 1.26%, to $2.969 per million British thermal units (btu). November gasoline futures dropped $0.0205, or 1.77%, to $1.1376 per gallon. November heating oil futures slid $0.0099, or 0.85%, to $1.1508 a gallon.