Shares of energy companies led market decliners as oil prices fell sharply after new coronavirus restrictions in Europe and the speedy return of production in Libya threatened to undermine efforts to chip away at a global glut of crude.
Over the weekend, Italy and Spain introduced some of the strictest curbs since the two countries exited their initial lockdowns, including early closures of bars and restaurants and a nighttime curfew. The measures are set to crimp demand for gasoline and other fuels, analysts said, slowing a recovery that had already started to falter.
The resurgence of the coronavirus in the U.S.-which reported more than 60,000 new cases Sunday-also has the potential to squeeze oil consumption.
The return of Libyan crude is also adding pressure to oil prices. Libya's National Oil Corp. said Monday it had instructed the operator of the el-Feel oil field to resume output. That followed Friday's statement that Libyan output would rise to 800,000 barrels a day within two weeks, and a million barrels in four weeks.
Meanwhile, natural gas prices continue to consolidate at levels above $3 as extremely cold temperatures in places such as Colorado and Utah give an immediate and early jolt to winter heating demand.
In corporate news, Canadian oil-sands producer Cenovus Energy and Husky Energy, controlled by Hong Kong billionaire Li Ka Shing, agreed to merge in an all-stock deal valued at 3.8 billion Canadian dollars, equivalent to US$2.9 billion. The deal would create the third-largest oil and natural-gas producer in Canada and the second-largest Canadian refiner.
Write to Amy Pessetto at amy.pessetto@dowjones.com
(END) Dow Jones Newswires
10-26-20 1659ET
