Oil prices have dropped significantly over apprehensions that Hurricane Irma in the Caribbean could disrupt crude shipments in the US and on reports of an increase in Libyan crude output after weeks of interruption.
Brent crude futures LCOc1 dropped 21 cents to $53.99 a barrel, while the US West Texas Intermediate (WTI) crude futures CLc1 dropped 18 cents to $48.98, reported Reuters.
The refineries located in Gulf region of the US have started resuming activities following the devastation due to Hurricane Harvey nearly two weeks ago.
Around 3.8 million barrels of daily refining capacity are still closed.
However, the new storm Hurricane Irma has hit the Caribbean islands and is currently advancing towards Florida with wind speeds of up to 295km/h.
Following Irma, the US National Hurricane Centre has also detected two other hurricanes that are currently developing in the Gulf of Mexico region.
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Oanda senior market analyst Jeffrey Halley was quoted by the news agency as saying: "Demand may continue to be distorted as multiple hurricanes make their way across the Caribbean."
On the other hand, the largest oilfield in Libya, Sharara, resumed production after two weeks adding further pressure on crude prices.
The output from the field was suspended after a pipeline was shut by an armed group.