Crude oil futures fell after revived production at a Libyan oil field sparked fears of an inventory flood.
West Texas Intermediate contracts slipped as much as 4% to $39.27. Brent crude, the commodity’s international standard, fell 3.1% to an intraday low of $41.93. Both contracts retraced some gains following the decline.
The Messla oil field and Sarir refinery restarted operations after halting due to technical issues.
Crude imports and exports had also been halted in Libya since January due to regional tensions and the country’s civil war.
The new supply out of the country adds inventory to a market that largely doesn’t want it.
US oil has since turned higher and loosely reconnected with its international peer’s price action.
Yet after rallying through May, prices have stabilized at $40 per barrel.
With the surge in novel coronavirus cases throughout the US and some lockdown measures going back into effect, oil demand shows no signs of picking up in the near future.