Crude oil price jumped on Tuesday towards $41 a barrel amid surging coronavirus infections, U.S stimulus uncertainties and an ascending Libyan production rate.
Brent crude gained one percent to sell at $40.87 per barrel, U.S. oil also rose by one percent to $38.94 after both contracts slid about three per cent on Monday.
The rise however comes at an untimely moment for some oil companies around the U.S. Gulf of Mexico as they set to shut down some oil output due to an impending Hurricane Zeta. Companies, including BP, Chevron, and Equinor ASA, have evacuated rigs, and producers have shut 16 per cent of barrels per day (bpd) of oil output due to the hurricane.
Recently, oil production has faced a series of declines due to rising coronavirus infections globally and a lack of direction for the U.S. coronavirus relief package.
Libyan production is expected to reach one million barrels per day (bpd) in coming weeks, complicating efforts by the Organisation of Petroleum Exporting Countries (OPEC) members and allies, known as OPEC+ to maintain output cuts this year.
The organisation plans to increase production by two million bpd in January 2021 when the oil crises currently troubling the oil industry abates.