Oil Prices Declined on Monday as Experts Expect Surge in Global Supply

Oil prices declined on Monday as the global oil market expected additional oil supply from both Norway and Libya following an agreement reached between the two rival sides.

Nigeria’s type of crude oil, Brent Crude oil, declined from 1.40 percent to $42.25 as at 11:20 am Nigerian time. While the US West Texas Intermediate crude oil dipped by 1.48 percent to $40 per barrel.

On Sunday, the United Nations Support Mission in Libya (UNSMIL) had announced that rebel and the government had agreed to hold a physical meeting in neighbouring Tunisia in November and also agreed to commence crude oil production in the nation’s largest oil field, Sharara oil field, on Sunday 11 October 2020.

According to UNSMIL, the meeting aim “to generate consensus on a unified governance framework and arrangements that will lead to the holding of national elections in the shortest possible timeframe”, it added.

UNSMIL said it “has made it a requirement for participants to the Libyan Political Dialogue Forum (LPDF) to recuse themselves from political and sovereign positions in any new executive arrangement … and to refrain from the use of hate speech and incitement to violence”.

This was after Norwegian oil firms reached an agreement with labour on Friday to put an end to a 10-day strike that has crippled oil supplies from the country and moderated global glut.

“One of the bullish factors that had been supporting prices fell apart late in the day when it was announced that Norway would end their strike,” said Phil Flynn, senior analyst at Price Futures Group in Chicago.

While experts are predicting an increase in global oil in supply, series of uncertainties like the hurricane Delta in the gulf of Mexico and the U.S. House Speaker, Nancy Pelosi, announcement that she would resume talks on $1.8 trillion stimulate may continue to support prices in the meantime.