Brent crude futures closed down $3.77, or 4.9%, at $73.75 a barrel, their lowest level since December 12
Oil prices settled nearly 5% down on Tuesday at their lowest levels in almost nine months on signs of a deal to resolve a dispute that has halted Libyan crude production and exports.
Brent crude futures closed down $3.77, or 4.9%, at $73.75 a barrel, their lowest level since December 12. WTI crude futures, which did not settle on Monday because of the U.S. Labor Day holiday, declined $3.21, or 4.4%, to $70.34 – also their lowest since December.
Brent closed down 0.3% last week, while WTI settled down 1.7%.
Libya’s legislative bodies have agreed to appoint a new central bank governor within 30 days after U.N.-sponsored talks, a statement signed by representatives of those bodies said on Tuesday.
Libyan oil exports at major ports were halted on Monday and production curtailed across the country, engineers told Reuters, continuing a standoff between rival political factions over control of the central bank and oil revenue.
The speculation about a deal was triggering momentum selling, according to Ole Hansen, an analyst at Saxo Bank.
Libya’s National Oil Corp (NOC) declared force majeure on its El Feel oilfield from September 2.
Total production had slumped to little more than 591,000 bpd as of August 28 from almost 959,000 barrels per day on August 26, NOC said. Production was at nearly 1.28 million bpd on July 20, the company said.
Ahead of the news of more Libyan supply possibly returning to the market, prices had dropped on the belief that demand was being undercut because of sluggish economic growth in China, the world’s largest crude importer.
The weaker-than-expected Chinese manufacturing PMI over the weekend likely exacerbated concerns about the Chinese economy’s performance, according to Charalampos Pissouros, senior investment analyst at brokerage XM.
China reported on Monday that new export orders dropped for the first time in eight months in July and that, prices of new homes increased in August at their weakest pace this year.
