Crude oil futures tumbled on both sides of the Atlantic on Monday on early signals that oil output in Libya may be starting to recover and concerns over a buildup in local government debt in China, the world's second-largest oil consumer.
Brent is less than $1 from where it began in January after trading in a range of $22, while U.S. crude has gained 8 percent year-to-date in spite of ever-climbing domestic shale oil production.
Libya's Sarir and Messla oilfields are up and running, a National Oil Corp spokesman said, although the Hariga port they connect with needs to reopen before exports can resume.
The North African OPEC producer has been pumping a mere 250,000 barrels per day (bpd) versus 1.4 million bpd in July before civil unrest disrupted flows.
China's state auditor said in a report local governments had total outstanding debt of 17.9 trillion yuan, or nearly $3 trillion, at the end of June, a sum that includes contingent liabilities and debt guarantees.
"The China debt revelation was very unsettling, and raises a big concern for the oil market's swing demand center. The resumption of some Libyan oil is also pressuring prices today," said John Kilduff, partner at Again Capital LLC in New York.
U.S. crude futures dropped on profit-taking after reaching a two-month high above $100 on Friday following a report showing stockpiles of crude oil had fallen for a fourth straight week, analysts said.
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