Oil prices hit new lows as Libya crisis and OPEC+ actions unfold
Oil prices on the fuel exchange in New York continued to decline after a significant sell-off during the previous session, falling by almost 5%. Brokers report that concerns about a potential oversupply of this commodity are increasing in the markets while demand for fuel is weakening.
A barrel of West Texas Intermediate oil for October delivery costs $69.94 on NYMEX in New York, after a decrease of 0.57%. Such low oil prices in the U.S. have not been recorded since January 2024.
Brent on the ICE for November is valued at $73.40 per barrel, down by 0.47%.
In recent days, investors have been closely watching the situation in Libya, one of OPEC's oil suppliers, and have analyzed OPEC+'s plans to increase oil supplies from this group starting in October.
Crisis in Libya
A political crisis continues in Libya, caused by the power struggle in this OPEC member state.
The Libyan authorities in the eastern part of the country have halted production and export of Libyan oil due to an ongoing dispute with the rival authorities in the West, which are internationally recognized.
The "eastern" and "western" governments in Libya remain at an impasse regarding the central bank of Libya, which is the custodian of billions of dollars in oil export revenues.
However, the markets are signaling that an agreement resolving the dispute and restoring oil supplies from Libya seems close to being reached.
The governor of Libya's central bank, Sadiq Al-Kabir, who was previously removed from this position by the "Western" authorities in Libya, said on Tuesday that there are "strong" signs that the warring political factions in Libya are close to reaching an agreement to overcome the current impasse.
Al-Kabir and other employees of Libya's central bank had previously fled the country due to threats from armed groups.
Al-Kabir found refuge in Istanbul. "If they sign today, I'll be back tomorrow," he announced.
OPEC+ wants to restore increased supplies
Meanwhile, investors are evaluating OPEC+'s plans to restore greater oil supplies to global markets by this group of producers starting in October.
The OPEC+ alliance plans to deliver 180,000 more barrels of oil per day to the markets starting in October, gradually restoring production that had been limited since 2022.
Representatives of OPEC+ assure that there are no signs that the group of oil producers might postpone its plans to increase production.
