Oil prices fall on news that Libyan supply could return to the market by Investing.com

U.S. crude futures opened modestly higher, with U.S. crude futures trading about 0.3 percent higher at $70.32.

During a volatile trading session on Tuesday, oil prices fell to their lowest levels since mid-December, falling 4.9% to settle at $73.75 a barrel, and WTI crude futures fell by 4.4%, up to 70.34 dollars per barrel.

Potential end to a dispute in Libya

A major sell-off occurred on news centered on a potential resolution to a dispute in Libya that has caused the country’s crude production and exports to halt.

Libya’s legislature has agreed to appoint a new central bank governor within 30 days following United Nations-sponsored talks.

Tuesday’s announcement raised hopes for an end to the political deadlock that has severely disrupted Libya’s oil exports.

On Monday, major Libyan ports halted oil exports and production was cut across the country due to a conflict between rival factions fighting for control of the central bank and access to oil revenues.

The impact of the dispute on Libya’s oil production has been severe. National Oil Corporation (NOC) reported that total production fell dramatically to just over 591,000 barrels per day (bpd) on August 28, down from nearly 959,000 barrels per day two days earlier, according to Reuters.

That marked a significant drop from about 1.28 million bpd on July 20, indicating the severity of output cuts.