Brent crude futures declined below $111 a barrel today as Libya ended an oil crisis by signing an agreement with rebels to reopen two oil terminals.
Brent declined 47 cents to $110.77 a barrel while US oil dropped 33 cents to $104.15 a barrel, Reuters reported.
The move allows Libya to produce an additional 500,000bpd of crude ready for export.
The news agency reported that the current situation in Iraq is still providing a floor for prices, with industry officials and analysts saying the global spare production capacity may struggle to cover another big oil outage.
Iraq Prime Minister Nuri al-Maliki said he expects parliament to form a new government in its next session.
Large swathes of Baghdad’s north and west regions are currently under the control of an Al-Qaeda splinter group.
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The violence in Iraq has had little impact on its exports to date and a Reuters survey found that production fell by approximately 170,000bpd in June, with southern exports affected by technical issues.
The latest data from the US Energy Information Administration (EIA) suggested that the economy is recovering.
The EIA data revealed that US crude stocks fell by more than anticipated last week as refineries increased production before the 4 July holiday weekend.