Oil slides as Libya restarts production from biggest oilfield

• WTI Oil slides by 1% on Monday as supply normalizes. 
• Libya opens up its biggest oilfield after a two-week halt due to an outage. 
• The US Dollar Index faces selling pressure and could slide lower this week. 

Oil prices are sliding lower by 1% on Monday as Libya’s state-run National Oil Corporation has said its biggest Oil field is coming back online. This means an additional production of  270,000 barrels per day, putting overall output back above 1 million barrels per day for the OPEC country. 

Meanwhile, the DXY US Dollar Index is facing some selling pressure from a technical point of view. The index posted lower highs and lower lows on the daily chart, signalling that the US Dollar is set to slide lower soon. On the economic data front this week, traders will face the US Gross Domestic Product (GDP) print and the Fed’s preferred inflation index, the Personal Consumption Expenditure (PCE) Price Index. 

Crude Oil (WTI) trades at $72.78 per barrel, and Brent Oil trades at $77.72 per barrel at the time of writing. 

• Oil news and market movers: Libya adds supply
• Libya’s Sahara field has restarted its production after a two-week halt, putting the country back above 1 million barrels per day on output, Bloomberg reported. 
• Chinese Oil data shows Russia has become the main supplier for the Asian country. 
• Chinese demand surged by 8.6% to 14.24 million barrels per day.
• China kept its Prime Loan rates again unchanged on Monday, while markets anticipated further easing in order to support the economy. This could mean demand for Oil could abate in the coming months. 

Oil Technical Analysis: More pressure for OPEC

Oil prices are struggling with again an OPEC member defying the production cuts Saudi Arabia is enforcing. After Russia already breached its production cut commitments, Libya is adding more supply as its biggest Oil field comes back online, putting the country back above 1 million barrels per day in production. 

On the upside, $74 continues to act as a line in the sand after a failed break above it on Friday.  Although quite far off, $80 comes into the picture should tensions build further. Once $80 is broken, $84 is next on the topside. 

Below $74, the $67 level could still come into play as the next support to trade at, as it aligns with a triple bottom from June. Should that triple bottom break, a new lowcould be close at $64.35 – the low of May and March 2023 – as the last line of defence. Although still quite far off, $57.45 is worth mentioning as the next level to keep an eye on if prices fall sharply. 

US WTI Crude Oil: Daily Chart