Libya's full reentry into the oil market pressures crude prices

Libya’s oil output has doubled from August levels to more than a million barrels a day after rival factions came to an agreement in late September over whom should run the central bank. 

The return of Libyan oil to international markets is weighing on the price of crude across the Mediterranean and North Sea, Bloomberg reports. Differentials of many grades of crude have fallen by over $1 a barrel over the past two weeks. 

The extra supply of Libyan oil comes at a weak time for European crude oil markets. They’ve been hit by refinery outages, poor refining profits and elevated freight rates. 

The availability of Libyan oil is also reducing demand for other crudes, including Azeri Light and Caspian CPC Blend, which have seen price declines. Norway’s Johan Sverdrup crude is also being sold at its lowest discount in six months, as Libya's return cuts demand for Nigerian oil.