London — Oil prices steadied on Tuesday but remained under pressure from the threat to demand from a global resurgence in coronavirus cases and rising Libyan output.
Brent crude futures were trading flat at $42.62 a barrel by 1206 GMT. U.S. West Texas Intermediate (WTI) crude futures rose 5 cents, or 0.1%, to $40.88.
Both contracts have been trading in a $2 to 2.50 per barrel range for two weeks.
COVID-19 cases topped 40 million on Monday, according to a Reuters tally, with a growing second wave in Europe and North America sparking various degrees of lockdown measures.
“Tuesday found oil traders struggling to make up their minds on how to interpret the result of the previous day’s OPEC+ meeting,” said Bjornar Tonhaugen, head of oil markets at Rystad Energy.
A meeting on Monday of a ministerial panel of the Organization of the Petroleum Exporting Countries (OPEC) and its allies, together known as OPEC+, pledged to support the oil market as concerns grow over soaring coronavirus cases.
For now OPEC+ is sticking with a deal to curb output by 7.7 million barrels per day (bpd) to the end of the year and then increasing production by 2 million bpd in January.
“Monday’s JMMC meeting failed to match market hopes of scrapping the planned output rise in January amidst an increasingly precarious demand environment,” JBC Energy said.
OPEC watchers, including analysts from U.S. bank J.P. Morgan, have said that a weak demand outlook could prompt OPEC+ to delay the reduction in curbs.
“Demand recovery is uneven … Today this process has slowed down because of a second coronavirus wave but has not yet fully reversed,” Russian Energy Minister Alexander Novak told the JMMC meeting.
OPEC member Libya, which is exempt from the cuts, is ramping up production after armed conflict shut almost all of the country’s output in January.
Output from its biggest field, Sharara, resumed on Oct. 11 and is now at about 150,000 bpd, about half its capacity, two industry sources told Reuters.
Another 70,000 bpd oilfield is expected to restart on Oct. 24.
- Reuters (Additonal reporting by Sonali Paul in Melbourne and Roslan Khasawneh in Singapore; editing by David Goodman and Jason Neely)