Proactive Investors - Oil prices have plunged to their lowest level so far this year on news a dispute which has seen Libya’s output axed could be coming to an end.
Brent crude slipped to US$73.33 on Wednesday morning, marking a 5.2% drop over the past day, while West Texas Intermediate fell by 5.8% to US$69.84.
This came after Libya’s legislative bodies released a statement on Tuesday highlighting an agreement to appoint a new central banker within 30 days.
Libya’s oil production had been slashed in recent weeks over the dispute between rival political factions in the country over control of its central bank and oil income.
Just 591,000 barrels of oil per day were being produced in Libya as of late August, against July’s daily average of 1.28 million.
Exports from major Libyan ports were halted on Monday as part of the dispute, according to Reuters, which threatened to bring an end to a period of relative peace in the country.
News the dispute could be nearing an end has eased concerns over supply as a result, prompting a sell off as fears of sluggish demand from the likes of China reemerged.
Warnings have previously been issued of a global oil supply surplus over the coming year, in part due to speculation OPEC will boost output from October.