Oil Slumps as Libyan Conflict Eases

4 Sep 2024 , 10:08 AM

Oil prices fell on Wednesday, extending the previous day’s more than 4% drop, on hopes that the political standoff that has stalled Libyan exports will be resolved and concerns about reduced global demand growth.

Brent crude futures for November slipped 28 cents, or 0.4%, to $73.47, after plunging 4.9% the previous day. West Texas Intermediate crude futures for October fell 31 cents, or 0.4%, to $70.03, following a 4.4% plunge on Tuesday.

Both contracts fell to their lowest levels since December on signs of a compromise to settle the political standoff between opposing factions in Libya, which has reduced output by roughly half and slashed exports.

Libya’s two legislative bodies agreed on Tuesday to jointly pick a central bank governor, potentially defusing the current debate over control of the country’s oil earnings.

Libyan oil exports at major ports were halted on Monday, while output was reduced throughout the country. Libya’s National Oil Corp (NOC) announced force majeure at its El Feel oilfield on September 2.

Market mood also dropped when the Institute for Supply Management reported on Tuesday that US manufacturing remained lacklustre in August, despite a minor rebound from an eight-month low in July.

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