Libya holds Africa's largest crude oil reserves, but because of rebel incursions in the eastern part of that nation, oil output has slowed to a trickle. Last year at this time, Libya produced roughly 1.4 million barrels per day. The present tally is around 250,000 barrels per day putting them in last place of all OPEC producers.
But production output is set to increase dramatically as rebels have handed over control of two of the oilfields in question and will release the remainders in a few weeks. The expectation is for global inventories to rise quickly, pressuring crude prices worldwide.
In response, Brent crude prices have fallen at least a full percentage point on the day, but higher U.S. deferred gasoline prices are holding WTI in place.
Industry watchers are quick to call this a bearish development for Brent prices. The two terminals back in Libyan national hands can produce a combined 180,000 barrels per day with another two terminals capable of a half million barrels per day still under rebel control. Once the last two terminals are handed over, global crude prices should find another leg lower.