Crude oil prices drifted lower at the first trading session of the week. The drop is coming as U.S. producers began regaining its lost output after Hurricane Delta subdued, coupled with a strike that had affected production in the North Sea region.
At the time of writing, Brent crude prices dropped 0.93% to trade at $42.45/barrel, and U.S. West Texas Intermediate prices were also down by over 0.91% to trade at $40.23 a barrel.
However, both major oil contracts printed more than 9% gains last week, the biggest weekly gain for Brent crude since June.
Despite hurricane Delta disruption last week, crude oil prices are still holding around $40 a barrel over the past few months, encouraging U.S. energy firms to add oil and natural rigs for a fourth week in a row last week, data from Baker Hughes showed.
What they are saying
Stephen Innes, Chief Global Market Strategist at Axi, in a note to Nairametrics, gave vital macros, such as ever-increasing oil supplies in a fragile energy market.
“With the expected return of exogenous supply and as short-term constraints begin to ease, oil is slipping back to WTI $40 at the open as New York futures fell as much as 0.9%, after declining 1.4% on Friday.
“Oil prices fell as operations in the Gulf of Mexico began to resume following Hurricane Delta. Libya is taking significant strides to rejuvenate plans to restart production, and oil workers in Norway called off a strike.
According to local drillers, Libya’s Sharara field will initially pump 40,000 barrels of crude a day before reaching its capacity of almost 300,000 barrels in 10 days.”
The permanency of these barrels returning to the market will worry oil bulls and provide a nagging pain in the neck to OPEC.