Oil steady as surging virus cases cloud demand outlook

LONDON: Oil prices were largely steady on Monday but on track for their first monthly fall since April as rising coronavirus cases continued to spur concerns about demand.

Brent crude slipped 3 cents to $41.89 a barrel by 1400 GMT. US West Texas Intermediate was at $40.12 a barrel, down 13 cents or 0.3%.

"The rise in daily infections has accelerated and the total number is now very close to 33 million. The most impacted countries are the populous ones," PVM analyst Tamas Varga said.

"The speed with which the virus is spreading is the main concern for both health officials and financial investors."

Russian Energy Minister Alexander Novak said on Monday that the global oil market has been stable for the past few months and the demand-supply balance restored, but warned of the risks of a second wave of COVID-19 cases.

Meanwhile one of the heaviest clashes between Armenia and Azerbaijan since 2016 broke out over the weekend, reigniting concern about stability in the South Caucasus, a corridor for pipelines carrying oil and gas to world markets.

Despite efforts by the Organization of the Petroleum Exporting Countries and their allies to limit output, more crude is being exported from OPEC producers Iran and Libya.

OPEC Secretary General Mohammad Barkindo said on Sunday that commercial oil inventories in OECD countries are expected to stand only slightly above the five-year average in the first quarter of 2021, before falling below that level for the rest of the year.

A factor that may offer some support to the market is the prospect of industrial action in Norway, where a workers' strike that may take place on Sept. 30 is threatening to cut its production by 900,000 barrels per day, the Norwegian Oil and Gas Association (NOG) said on Friday.