Energy
Oil settled below US$40/bbl on Friday, with the market fretting over news that President Trump tested positive for Covid-19, while a surge in Covid-19 cases across parts of Europe continues to be a concern for the oil market. The latest Commitment of Traders Report shows that speculators reduced their net long in ICE Brent by 6,974 lots over the last reporting week, to leave them with a net long of 97,222 lots as of last Tuesday. However, given the pressure we saw on the market towards the end of last week, the current net long is likely even smaller.
The supply side is also not helping the oil market, with Libyan oil output continuing to edge higher, and according to a Bloomberg report, is pumping at around 295Mbbls/d. This is up from 270Mbbls/d on Thursday, and well above the roughly 100Mbbls/d the country was pumping prior to the lifting of export blockades. Libya still has some distance to go to get back to the more than 1MMbbls/d it was producing at the start of the year. Elsewhere, the latest data from Baker Hughes shows that the US oil rig count increased by 6 over the last week, leaving the total number of active oil rigs at 189, which is the highest count seen since June.
Finally, according to the Norwegian Oil and Gas Association, oil workers have decided to escalate their strike action this week in Norway, which will affect 6 fields. These 6 fields produce around 330,000 boe/d, and so around 8% of total Norwegian Continental Shelf output is at risk if production at these fields needs to be shut-in due to strike action.
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October 05, 2020 at 07:45AM
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The Commodities Feed: Oil sell-off - ING Think
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