Brent crude oil fell below $106 to start the week as the Libyan government neared a deal with rebels to reopen several of its largest oilfields. The commodity traded at $105.83 at 6:15 GMT on Monday morning as investors braced for an influx of supply.
Tension between anti-government groups and the Libyan government have kept Brent prices elevated for more than eight months. The nation's oil exports have been depressed to less than half of its normal capacity due to the seizure of most of the country's largest oilfields.
However, Reuters reported that rebel groups holding some of Libya's eastern oil ports have agreed to reopen the ports and gradually restart the nation's exports.
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Details regarding the volume of oil expected to be reintroduced are unknown, so there is a lot of uncertainty around the impact this development will have on markets. Some analysts don't expect to see Brent under much pressure unless Libyan exports exceed one million barrels per day.
This week, investors will also have their eyes on a new round of negotiations between the US, Britain, France, Germany, China, Russia and Iran over Tehran's nuclear capabilities.
Reports that Iran has been exceeding the export limit set in the preliminary agreement which eased sanctions on the nation's oil production have been dismissed by US officials as they prepare for another set of talks.
With the possibility of the temporary agreement extending and allowing more oil into the global market, Brent prices are likely to face a lot of pressure in the coming days. Some say the commodity could fall as low as $104 due to increasing supply.
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- Commodity Markets
- Politics & Government
- Brent crude oil
- Libyan government