Commodity Market: US Crude Oil retreats as concerns over rising supply and weaker demand offset reports of production shutdown

Futures on US West Texas Intermediate Crude Oil edged lower on Monday as concerns over rising global supply and weakening fuel demand overshadowed reports of oil drillers evacuating facilities and shutting down production in the Gulf of Mexico as another tropical storm was heading towards the area.

News of oil production being shut down usually supports oil prices, but demand concerns stemming from worsening COVID-19 pandemic and excess supplies appeared to be a drag on both WTI and Brent contracts.

Tropical Storm Sally strengthened in the Gulf of Mexico on Sunday and was expected to transform into a category II hurricane. Oil output in the region is being disrupted by tropical storms for the second time in less than 30 days after hurricane Laura hit the Gulf in August.

On Sunday BP Plc and Equinor ASA evacuated personnel from offshore platforms after Chevron Corp and Murphy Oil Corp did so a day earlier.

In other news, Libyan Field Marshal Khalifa Belqasim Haftar committed to discontinuing a blockade of oil facilities that lasted for months, which would increase oil supplies to the market.

“The announcement that the blockade of Libyan oil export terminals may be about to end will add to the woes of OPEC+’s meeting this week,” Jeffrey Halley, senior market analyst at OANDA, said.

OPEC+ members are scheduled to meet on September 17th to review compliance with oil production cuts.

As of 8:57 GMT on Monday WTI Crude Oil Futures were retreating 0.70% to trade at $37.07 per barrel, while moving within a daily range of $37.02-$37.68. WTI Crude Futures have retreated 13.05% so far in September, following four straight months of gains.

Brent Oil Futures were retreating 0.58% on the day to trade at $39.56 per barrel, while moving within a daily range of $39.49-$40.06. Brent Oil Futures have dropped 13.26% so far in September, following five straight months of gains.

Daily Pivot Levels (traditional method of calculation) – WTI Crude Oil Futures

Central Pivot – $37.27
R1 – $37.88
R2 – $38.42
R3 – $39.03
R4 – $39.63

S1 – $36.73
S2 – $36.12
S3 – $35.58
S4 – $35.03

Daily Pivot Levels (traditional method of calculation) – Brent Oil Futures

Central Pivot – $39.84
R1 – $40.27
R2 – $40.76
R3 – $41.19
R4 – $41.63

S1 – $39.35
S2 – $38.92
S3 – $38.43
S4 – $37.95