Brent crude <LCOc1> was down 95 cents at $42.20 a barrel by 1205
GMT. U.S. crude <CLc1> fell 90 cents to $40.21 a barrel. Both
contracts were set for their biggest daily drops in two weeks.
Workers at Libya's major Sharara field have restarted
operations, two engineers working there said, after the National
Oil Corporation announced a partial lifting of force majeure.
But it was unclear when and at what level production might
restart.
Meanwhile, a Suezmax tanker is making its way to Libya's Marsa
El Hariga terminal, according to Refinitiv Eikon shipping data.
"(The) oil market is facing a fork in the road this week when it
comes to pricing, and which option it chooses to travel will
largely depend on how much real progress will come about in
Libya," BNP Paribas analyst Harry Tchilinguirian said.
Goldman Sachs stuck to its forecast for Brent to reach $49 a
barrel by year-end and $65 by the third quarter next year,
despite the Libyan developments. Barclays raised its 2020 Brent
outlook to $43 a barrel and $53 next year.
Bullish sentiment is underpinned by the hope for improved
compliance with an output cut deal among members of the
Organization of the Petroleum Exporting Countries (OPEC) and its
allies.
But a rise in coronavirus cases could cut demand.
More than 30.78 million people have been infected by the novel
coronavirus, a Reuters tally shows, and British Prime Minister
Boris Johnson was on Monday pondering a second national
lockdown, while cases in Spain and France have also climbed.
Providing a floor for prices, U.S. tropical Storm Beta, the 23rd
named storm of this year's Atlantic hurricane season, moved
ashore threatening production.
(Additional reporting by Jessica Jaganathan; editing by Barbara
Lewis and Louise Heavens)
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