Oil little changed, despite OPEC+ members stressing compliance

An oil tanker sits beside transfer pipes at a terminal as it prepares to unload its cargo of fuel on July 4, 2018 in Zhoushan, China.
VCG | Getty Images

Oil steadied on Monday, weighed by concerns over surging coronavirus cases globally and by Libya's plan to boost output, but supported by hopes for a U.S. fiscal package.

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

Brent crude futures fell 22 cents to $42.71 a barrel. U.S. West Texas Intermediate (WTI) crude futures settled 5 cents, or 0.1%, lower at $40.83 per 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 totaling 9.7 million bpd, and are due to reduce the cuts by a further 2 million bpd in January.

"This group has shown, especially in this year, that it has the flexibility to adapt to changing circumstances when required. We will not dodge our responsibilities in this regard," Saudi Energy Minister Prince Abdulaziz bin Salman said.

Weighing on markets, 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 U.S. stimulus package lent some support to prices as House Speaker Nancy Pelosi said on Sunday she was optimistic that legislation on a wide-ranging relief package could be pushed through before the election.

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.