Oil prices dip as Libya crisis deepens, OPEC+ aims for higher output

Oil prices on the fuel exchange in New York continue to decline after a "solid" sell-off during the previous session—by almost 5%. Concerns about a potential oversupply of this raw material are increasing in the markets while demand for fuels is weakening, brokers report.

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.

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 rival authorities in the West, which the international community has 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 to resolve the dispute and restore 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 the agreement today, I'll return tomorrow," he announced.

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 29,000 more litres of oil per day to the markets from October, gradually restoring production that has 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.