Oil prices hit yearly low amid prospects of Libyan production resuming

Global oil prices plunged to their lowest level in a year this week, driven by expectations that Libya will soon resume production while global demand remains subdued.

Brent crude, the international oil benchmark, fell by approximately 5% to $73.67 per barrel, while U.S.-traded West Texas Intermediate (WTI) dropped 4.5% to $70.25, according to the Financial Times.

The sharp decline followed a Bloomberg report indicating that Libyan central bank governor Sadiq al-Kabir, who has been at the center of a political dispute between rival factions, suggested a compromise was likely.

This development led investors to speculate that Libyan oil production could ramp up after being cut by about 60% last week when the eastern government, based in Benghazi, ordered a shutdown in a political maneuver.

The anticipated rise in Libyan output comes amid concerns of an oversupply in the global oil market. Demand from China, the world's largest oil importer, remains weak, and U.S. demand has also fallen below the peak levels of the summer driving season.

Attention now turns to OPEC, with investors questioning whether the member states will proceed with planned production increases in October or hold off to stabilize prices.