Oil prices have dropped by 1% after Libya announced it would be increasing its output to 800,000bpd this week.
Brent crude fell LCOc1 slipped by 54 cents to $51.30 a barrel, while the US West Texas Intermediate (WTI) crude futures CLc1 declined by 51 cents to touch $49.15 a barrel, reported Reuters.
The rise in production by the National Oil Corporation of Libya is anticipated to complement the increasing US output that will offset OPEC's efforts to tighten the market.
Thomson Reuters Eikon shipping data revealed that Libya exported an average of 500,000bpd of crude oil this year excluding pipeline delivery, a 200,000bpd rise from last year.
AxiTrader chief market strategist Greg McKenna was quoted by the news agency as saying: “Libyan and shale oil production seems to have occupied the mind of traders overnight.
“That's consistent with my sense that this is all about inventories and the associated supply overhang in crude oil markets at the moment.”
Earlier, OPEC and other participating nations agreed to extend the ongoing output curb of 1.8 million bpd until March 2018.
The deal started in January and has not had its intended impact on the oil market primarily due to a rise in US production. Despite being an OPEC member, Libya was exempt from the cuts deal.