Crude oil prices declined sharply amid concerns over excess supply in the market and worries about a possible drop in energy demand due to rising coronavirus cases.

Resumption of production in the Gulf of Mexico, higher output from Libya and the end of the strike by oil workers in Norway, have raised concerns that the market will have excess supply for now.

West Texas Intermediate Crude oil futures for November ended down $1.17 or about 2.9% at $39.43 a barrel.

Brent crude futures drifted down by about $1.20 or 2.8% to $41.64 a barrel.

According to reports several production platforms in the Gulf of Mexico have begun or about to begin work after having shuttered down last week due to Hurricane Delta.

In Norway, oil companies have struck a deal with labor union officials to end a strike that had threatened to cut oil and gas output by about 25%.

Production in Libya is expected to rise to 355,000 barrels per day after force majeure at the Al Sharara oil field located southwestern the country was lifted on Sunday, following an agreement with the Petroleum Facilities Guard (PFG).

Analysts said the likelihood of more Libyan exports will pose a challenge to Opec+ producers and their efforts to curb global supplies at a time of weak demand recovery.

According to reports, several states in America are likely to see a surge in coronavirus cases in coming weeks.

In the U.K., the government has imposed fresh restrictions in several ares where the virus is reportedly spreading fast.

The material has been provided by InstaForex Company – www.instaforex.com