One reason for the price weakness last week was the agreement reached by the conflict parties in Libya in the dispute over the leadership of the central bank, Commerzbank’s commodity analyst Carsten Fritsch notes.

Additional supply from Libya is likely to weigh on oil prices

“The agreement was reached by the conflict parties in Libya in the dispute over the leadership of the central bank. This had led to an interruption in oil production in the east of the country, causing nationwide oil production to fall from 1.2 million to less than 450 thousand barrels per day.”

“Yesterday, the parliament based in eastern Libya approved the appointment of the new central bank governor, which should enable oil production there to be ramped up. According to people familiar with the matter, this is expected to begin today. The additional supply from Libya is likely to weigh on oil prices.”

“A similar observation can be made for US oil production in the Gulf of Mexico. Hurricane Helene curtailed production there for several days last week. According to the relevant authority, the outages on Thursday amounted to about a quarter of US production in the Gulf of Mexico. By Sunday, production had almost returned to normal levels.”