Oil Prices Fell Nearly 3% As Supplies Resumed in Places Like Libya and Demand Faltered

International oil prices came under pressure to close down about 3 percent on Monday as crude production from Libya, Norway and the Gulf of Mexico resumed, Reuters reported Wednesday.

November WTI futures fell $1.17, or 2.9%, to settle at $39.43 a barrel on the New York Mercantile Exchange, the lowest level in a week. Brent crude for December delivery fell $1.13, or 2.6 percent, to $41.72 a barrel on the ICE Futures Exchange in London.

The Sharara field, the largest in OPEC member Libya, has been lifted out of force majeure, with output likely to rise to 355,000 b/d, the report said.

With Libya exempt from cuts, a rise in its output would challenge efforts by OPEC and its cutting Allies to curb supply in an effort to prop up prices.

Bob Yawger, head of energy futures at Mizuho, said there would be a flood of Libyan crude "and you just don't need these new supplies. That's bad news for the supply side".

Meanwhile, hurricane Delta, which last weekend downgraded to a post-tropical cyclone, last week dealt the biggest blow to energy production in the U.S. Gulf of Mexico in 15 years.

In addition, oil and gas production has resumed and will soon return to normal after workers in the U.S. Gulf Coast offshore oil field returned to production on Sunday after a strike.

Both front-month contracts rose more than 9 per cent last week, the biggest weekly gain since June, the report said. But both benchmark contracts fell on Friday after Norway's oil company reached a deal with union officials to end a strike that could cut the country's oil and gas production by almost 25 per cent. The strike has cut North Sea oil production by 300,000 barrels a day.

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