Oil prices slump on news Libyan supply may possibly return to the market

U.S. oil futures opened modestly higher with the Crude Oil WTI Futures crude oil futures trading about 0.3% higher at $70.32.

During a volatile Tuesday's trading session, oil prices plummeted to their lowest levels since mid-December, with Brent Oil Futures falling 4.9% to close at $73.75 a barrel, and WTI crude futures dropping 4.4% to $70.34 a barrel.

Potential end to a dispute in Libya

A major selloff took place on the news centered about the potential resolution of a dispute in Libya that has caused a halt in the country's crude production and exports.

Libya's legislative bodies have reportedly agreed to name a new central bank governor within 30 days, following United Nations-sponsored discussions.

The announcement on Tuesday raised hopes for an end to the political deadlock that has severely disrupted Libya's oil exports.

On Monday, major Libyan ports ceased oil exports, and production was cut throughout the nation due to a standoff between rival factions vying for control of the central bank and access to oil revenues.

The impact of the dispute on Libya's oil output has been stark. The National Oil Corporation (NOC) reported that total production had dramatically fallen to just over 591,000 barrels per day (bpd) on August 28, down from nearly 959,000 bpd two days earlier, according to Reuters.

This marked a significant drop from approximately 1.28 million bpd on July 20, indicating the severity of the production cuts.