Oil slips on rising coronavirus cases, returning Libyan supplies

NEW YORK (Reuters) – Oil prices fell on Tuesday due to rising COVID-19 cases and a possible return to Libyan oil production, which has slowed to a trickle since the beginning of the year.

FILE PHOTO: The sun can be seen behind a crude oil pump lifter in the Perm Basin in Loving County, Texas, the United States, Nov. 22, 2019. REUTERS / Angus Mordant

The more active September contract for Brent LCOc2 fell 0.3% to $ 41.70 a barrel at 11:41 a.m. EDT (1541 GMT), corresponding to the 92 cent gain on Monday. The August LCOc1 contract, which expires on Tuesday, fell 51 cents, or 1.2%, to $ 41.20.

US CLc1 crude fell 5 cents, or 0.1%, to $ 39.65 a barrel.

Coronavirus cases continue to increase in the southern and southwestern US states. Northeastern states such as New York and New Jersey have doubled the number of states from which travelers are subject to quarantine restrictions.

Fuel demand has recovered from the worst weeks of the April and early May outbreak, but there is a risk that the recovery will be interrupted by the resurgence of viral cases.

"Maintaining the independent representation of gasoline strength is being challenged by coronavirus headlines where news has changed significantly in recent weeks," said Jim Ritterbusch, president of Ritterbusch and Associates in Galena, Illinois, in a report.

Investors will look for signs of a recovery in demand in the weekly inventory data due on Tuesday from the American Petroleum Institute's industrial group and the U.S. government on Wednesday. (UVP / S)

Libya is trying to resume exports, which have been almost completely blocked since January during the country's civil war. The state oil company hopes that the talks will end the blockade of the eastern-based armed forces in the country's civil war.

"If we finally see a resumption of Libyan production, this would make the work of OPEC + somewhat more difficult," said the Dutch bank ING.

A Reuters analyst survey found that oil prices will consolidate at around $ 40 a barrel this year, with a recovery picking up speed in the fourth quarter.

Additional reporting from Ahmad Ghaddar in London, Sonali Paul in Melbourne and Koustav Samanta in Singapore; Edited by Marguerita Choy and David Evans

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