Oil futures inched lower on Friday, with increased output from Libya, uncertainty over another U.S. financial relief plan from Congress and worries about crude demand on the back of accelerating cases of COVID-19, setting prices up to post their first weekly loss in three weeks.
Overall, crude-oil futures have traded broadly sideways as “Congress and the White House try to hammer out a stimulus agreement prior to the election, while the pandemic continues to surge in much of Europe and the U.S.,” Marshall Steeves, energy markets analyst at IHS Markit, told MarketWatch. “The renewed imposition of lockdowns and travel restrictions threatens demand, so fiscal assistance in the U..S could be significant depending on its contents.”
Still, the resurgence of the pandemic is the “paramount issue and any fiscal measure likely only would prop up demand temporarily and possibly to a lesser extent than the pandemic lowers it,” said Steeves.
See: White House’s Kudlow says few signs of progress on fiscal stimulus talks
West Texas Intermediate crude for December delivery
fell 15 cents, or 0.4%, to $40.49 a barrel on the New York Mercantile Exchange, while December Brent crude
the global benchmark, lost 12 cents, or 0.3%, at $42.34 a barrel on ICE Futures Europe.
Based on the front-month contracts, WTI crude was on track for a 1.5% weekly fall, while Brent was down 1.4%, according to FactSet data.
Libya remains exempt from production cuts by the Organization of the Petroleum Exporting Countries and their allies, and “continues to make progress around restoring supply and exports,” said Robbie Fraser, senior commodity analyst at Schneider Electric.
“Peace talks between rival government factions continue to make progress, suggesting the recent end to an oil blockade that slashed exports for most of 2020 should remain,” he said in a Friday note.
Output reached 560,000 barrels a day on Wednesday, up from 150,000 in September, according to a report from Bloomberg, citing a person with knowledge of the matter.
Oil prices had climbed Thursday, in part due to comments from Russia President Vladimir Putin. He said he sees no need for global oil producers to change their existing deal on global supply, suggesting that Russia is ready to continue with current output cuts, Reuters reported Thursday.
Traders will pay attention later Friday to weekly data on the U.S. oil-rig count from Baker Hughes
Meanwhile, traders eyed election-related news as voters assessed the outcome of Thursday’s final presidential debate.
“The U.S. presidential election poses a clear choice on carbon and climate change,” said Steeves. Democrat Joe Biden would “cease fracking on public lands and move rapidly toward the transition to clean energy,” while a re-election of Republican President Donald Trump would “likely continue current policies that benefit oil and gas.”
“Biden would also like to have the U.S. rejoin the Paris Climate Accord, so the outcome of the election could have significant implications for the oil and gas industry,” he said.
Read: Here’s how the U.S. presidential election could shake up the oil market
Data released Wednesday from the Energy Information Administration had revealed a smaller-than-expected 1 million-barrel decline in U.S. crude supplies for the week ended Oct. 16, but gasoline stockpiles unexpectedly climbed.
Weak demand for for fuel has been a key concern in the oil markets since the travel-related disruptions from COVID-19 began earlier this year. The EIA reported that over the past four weeks ended Oct. 16, implied motor gasoline demand was down 8.7% from the same period a year earlier.
Read: What diesel demand and prices tell us about the economic outlook
On Nymex Friday, November gasoline
shed 0.6% to $1.1509 a gallon, with prices looking at a 1.5% loss on the week. November heating oil
was down less than 0.1% at $1.1601 a gallon, trading down 1.6% for the week.
November natural gas
traded at $2.969 per million British thermal units, down 1.3%. For the week, however, it was up over 7%.