Energy stocks plummet amid oil sell-off driven by threats of boosted production
- Energy stocks fell on Monday after supply-and-demand concerns for oil sent the commodity lower.
- Libya's National Oil Corporation said it would boost its oil production to 1 million barrels per day from 500,000 barrels per day by next month.
- Meanwhile, surging COVID-19 cases around the globe, combined with partial lockdowns in some European countries, have continued to weigh on demand for oil as travel remains depressed.
- Watch oil trade live here.
Energy stocks moved lower in Monday trades after supply-and-demand concerns for oil sent the commodity considerably lower.
West Texas Intermediate crude fell as much as 3.9%, to $38.28 per barrel, while Brent crude, oil's international benchmark, fell 3.6%, to $40.25 per barrel, at intraday lows.
Chevron, Exxon Mobil, and ConocoPhillips traded lower by 2%, 3%, and 6% in Monday trades, respectively.
The swift decline in oil and oil-related stocks stemmed from a boost in production from Libya after warring factions within the country that led to the shutdown of oil fields announced a truce.
On Friday, the National Oil Corporation of Libya said it would double its production to 1 million barrels per day from today's rate of 500,000 barrels per day by next month.
The oil production increase from Libya may put a dent in OPEC+'s plans to limit supply in hopes of boosting oil prices. If oil prices continue to deteriorate, OPEC may be forced to continue production at its current rate, if not higher, to make up for the shortfall in prices.
Also hurting oil prices is the swift rise in COVID-19 cases around the globe, and related partial lockdowns across Europe. The third wave of COVID-19 is set to put a dent in oil demand recovery as travel softens.