During the weekend, loyal groups to General Khalifa Haftar managed to disrupt the Lybian oil production, as they blocked the oil ports in eastern Libya and the Sharara fields in southern Libya as well as disrupting the transportation of crude from the fields to the export terminal.
On Sunday, more than half of the Lybian oil production was cut, putting pressure on the oil markets as investors feared about supply disruptions and its associated risks, and the production levels may remain there if oil facilities don't resume their operation quickly.
However, the head of the IEA said during the World Economic Forum meeting in Davos that he foresees a surplus by a million barrels per day during the first half of this year.
“I see an abundance of energy supply in terms of oil and gas,” said Fatih Birol.
Apparently the well-documented oil market supply flexibility is behind this optimism, as the most recent escalation in the conflict between the United States and Iran proved that increasing tension doesn't mean that the global oil supply will be disrupted in a significant way.
“It’s the reason that recent incidents we have seen - with the Iranian general killed, Libya unrest - didn’t boost international oil prices,” he explained.
Birol also expressed his concerns about the situation in Iraq
"I hope Iraq keeps its stability, and as an important producer, continues to bring oil to the markets," he said about the OPEC's second-biggest producer.
When asked about the demand levels, he added that they expect increasing demand from third-world markets.
"We expect oil demand to increase by about 1 million barrels per day, mainly from emerging countries," he said, ading that they also expect a supply increase (by about 2 million barrels per day) from non-OPEC countries like United States, Brazil, Norway, Guyana.
By 10:29 GMT the Brent crude oil futures lost 0.67 percent, dropping by 43 cents at 64.16. Conversely, the West Texas Intermediate crude oil market price fell by 0.74 percent, diminishing by 43 cents and reaching the 57.95 level.