Oil dips after OPEC+ meeting as Libyan supply boost weighs

NEW YORK: Oil edged lower on Monday, weighed by concerns over surging coronavirus cases globally and by Libya's plan to boost output, but hopes for a US fiscal package lent some support.

Analysts also focused on an OPEC+ ministerial monitoring committee meeting on Monday. Russian Energy Minister Alexander Novak said the committee recommended sticking in full to the group's global deal to reduce oil production.

Brent crude futures fell 31 cents to settle at $42.62 a barrel. US West Texas Intermediate (WTI) crude futures fell 5 cents to settle at $40.83 a barrel.

Saudi Arabia, the biggest member of the Organization of the Petroleum Exporting Countries, said no one should doubt the group's commitment to providing support, while three sources from producing countries said a planned output increase from January could be reversed if necessary.

OPEC+, a grouping of OPEC and allies including Russia, is curbing oil production by 7.7 million barrels per day (bpd), down from cuts totalling 9.7 million bpd, and are due to reduce the cuts by a further 2 million bpd in January.

"There were no grand surprises out of the OPEC+ meeting," said Phil Flynn, senior analyst at Price Futures Group in Chicago. "They said all the right things, but there were no big surprises so the market was fairly steady."

Weighing on prices, Libya has significantly boosted its output after the easing of a blockade by eastern forces in September. The 70,000-bpd Abu Attifel oilfield was expected to begin its restart on Oct. 24 after being shut down for months, two engineers said.

Meanwhile, worldwide coronavirus cases crossed 40 million on Monday, according to a Reuters tally. Many European governments are tightening lockdowns to curb the spread of the virus, renewing concerns about oil demand.

"This latest swathe of stringent restrictions will inevitably impede economic growth and undermine the fuel demand recovery," said Stephen Brennock of oil broker PVM.

Hopes for a new US stimulus package lent some support to prices. The White House is "cautiously optimistic" that Democratic House of Representatives Speaker Nancy Pelosi may be moving toward making a deal on a new coronavirus stimulus bill, a spokeswoman said on Monday.

Bank of America projected Brent and WTI would average $44 and $40 per barrel in 2020, respectively, and $50 and $47 per barrel in 2021.

Meanwhile, China's oil-buying frenzy earlier this year is expected to slow in the fourth quarter. Chinese refiners slowed their processing rates in September.