Oil slides with rising Libyan crude output adding to demand woes

Bloomberg

Oil falls to the lowest in three weeks as the threat of increased Libyan crude output added to concerns that a resurgence of the coronavirus will weaken the global economy.
Futures in New York fell as much as 3.7% to below $39 a barrel on Monday. Libya’s daily output has risen to 690,000 barrels from less than 100,000 in early September, and the country is poised to restart the last of its major oil fields following a cease-fire in its civil war. Meanwhile, White House Economic Adviser Larry Kudlow said there are aspects of the Democrats’ stimulus bill that President
Donald Trump can’t accept.
“People underestimate Libya’s ability to get back online fully quickly,” said John Kilduff, a partner at Again Capital LLC. “This is 1 million barrels a day that the market can ill-afford. It’s a one-two punch today, with renewed Covid concerns as well.”
More than half a year since the pandemic sent oil prices into a tailspin, the prospect of renewed lockdown restrictions is threatening to derail the fragile recovery in consumption. European diesel demand would drop by a quarter year-over-year and gasoline demand could fall by 30% year-over-year over a three-month period under a scenario that models a near-full scale lockdown, according to JBC Energy. Meanwhile, Saudi Arabia’s energy minister said at a conference on Monday that the oil market isn’t yet out of the woods, despite
a strong recovery in recent months.
“With the demand recovery still on a weak footing and increasing supply from Libya, it is becoming crucial that Opec+ delay their scheduled production increases,” TD Securities commodity strategists including Bart Melek said in a note.