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Oil prices dropped by almost 5% on Thursday, with expectations for a recovery in Libyan crude production and rising U.S. output sending prices back to levels they hadnt seen since before the OPEC output cut deal in November.

The possibility of power-sharing deal in Libya adds to the potential for more supply, said Phil Flynn, senior market analyst at Price Futures Group.

June West Texas Intermediate crude CLM7, -2.48% fell $2.30, or 4.8%, to settle at $45.52 a barrel on the New York Mercantile Exchange. July Brent crude LCON7, -2.15% on Londons ICE Futures exchange fell $2.41, or 4.8%, to end at $48.38 a barrel.

The United States Oil Fund LP USO, -4.73% an exchange-traded product, dropped 4.5%.

Both WTI and Brent, marked their lowest settlements since Nov. 29the day before the Organization of the Petroleum Exporting Countries reached an agreement to cutback production levels.

Read: OPEC faces high-stakes decision as oil drops to 5-month low

For WTI, the $44 level marks key support, and if prices take that level out, they could drop to $38, said Flynn.

Two of the largest factions in Libya have made progress in reaching a deal to resolve the nations political and economic crises, BBC News reported late Wednesday. Clashes between armed groups had caused intermittent shutdowns of Libyas biggest oil field.

A unified Libya could reach 1.5 million [barrels a day] in a few months, and it is excluded from OPEC quotas, said James Williams, energy economist at WTRG Economics, who pegged current Libyan output at about 700,000 barrels a day.

Libya and Nigeria dont have set production limits under OPECs six-month agreement among members to cut output down by a total of roughly 1.2 million barrels from October 2016 levels. In additional to that, some major producers outside of OPEC, including Russia, agreed to cut about 600,000 barrel a day.

OPEC is set to decide whether to extend the pact into the second half of the year, when it meets on May 25 in Vienna.

Williams said Nigeria wants to extend its exemption from quotas, which is a signal it hopes to increase production.

The road to consensus on a new deal remains uncertain and bumpy as just one OPEC member rejecting an agreement would likely be enough to upend the entire effort because the rest of the group would quickly jump back into market-share-first mode by pushing their output back up to pre-cut levels.

That decision is complicated by growing production in the U.S., which isnt subject to the agreement.

U.S. government data released Wednesday showed that weekly domestic crude production rose and inventories fell less than expected, deepening skepticism that production cuts from the Organization of the Petroleum Exporting Countries and its allies arent making a dent in elevated global stockpiles.

On Nymex, after a 1.3% gain Wednesday, June gasoline RBM7, -1.39% fell 3.4% to $1.481 a gallon and June heating oil HOM7, -1.47% lost 4.2% to $1.412 a gallon.

Natural-gas futures extended earlier weakness after the EIA on Thursday reported a larger-than-expected weekly rise in U.S. natural-gas supplies.

Inventories rose by 67 billion cubic feet for the week ended April 28. Analysts polled by S&P Global Platts forecast an increase of 61 billion cubic feet.

June natural gas NGM17, +0.00% settled at $3.186 per million British thermal units, down 4.2 cents, or 1.3%.

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Oil prices drop 5% as Libya output risks ease - MarketWatch

Any attempt to prevent refugees crossing the Mediterranean Sea by holding them in Libya would trap thousands of men, women and children in catastrophic conditions, the EU has been warned.

Sigmar Gabriel, the German foreign minister and Vice Chancellor, rowed back on Berlins previous support for plans ledby Italy to increase cooperation with the war-torn African state.

Ruthless smugglers have capitalised on widespread lawlessness to expand their human trade, while migrants are routinely detained by armed gangs and extorted or forced into forced labour and prostitution.

The camps existing on the ground already show horrible and catastrophic conditions, Mr Gabriel said.

The idea to set up [EU-backed] camps...would be an utter disregard of circumstances for the people.

Italy signed a deal with the fragile Libyan Government of National Accord (GNA) in Tripoli in February that also promised training, equipment and money to fight human traffickers - an agreement initially endorsed by EU states at a summit in Malta.

But the move has been criticised by humanitarian groups and the UN, which warned refugees suffer arbitrary detention, rape and torture.

Desperate journeys: Rescued at sea, refugees detail abuse in Libya

Last month, Pope Francis said the holding centres had become "concentration camps", while the International Organisation of Migration documented young African men being traded in slave markets.

The dire situation has so far scuppered prospects of replicating the controversial EU-Turkey deal, which has cut boat crossings over the Aegean Sea by seeing anyone arriving on Greek islands detained under the threat of deportation.

Mr Gabriel said parallels should not be drawn because Ankara had granted access to its camps to UN human rights experts.

"All of that does not apply to Libya, he told reporters in in the Ethiopian capital Addis Ababa after a meeting with African Union officials.

What we are trying instead is to help stabilise the countries on the continent. But that is difficult.

Turkey was offered huge amounts of money towards housing millions of refugees as part of the agreement, but there are concerns funding in Libya could pass to countless armed groups including Islamists and Isis.

The EU is currently considering a request for equipment including ships armed with machine guns for the Libyan coastguard, which itself which stands accused of beating and shooting refugees while pushing back boats launched by smugglers into the Mediterranean Sea.

Improving the capacity of the Libyan authorities to better manage borders and migration is a key objective of the EU's approach including that agreed by the EU and member states in Malta on 3 February, a spokesperson for the European Commission said.

"We are looking at ways in which we can follow this up in terms of providing non-military assets that would enable those that we have trained to do their job in the Libyan territorial waters.

A warlord supported by Russia, Khalifa Haftar, runs a rival government and army in eastern Libya that does not recognise the authority of the UN-backed GNA.

Both sides issued statements promising to calm tensions and fight terrorism on Wednesday, but offering no way forward for a political deal to unify the fractured country.

General Haftar and Prime Minister Fayez Seraj met in Abu Dhabi but were unable to agree on a hoped-for joint declaration.

Conflicting accounts of initial agreements and leaks of documents neither side signed have confused international mediation and negotiations to end the conflict in Libya, where a civil war has continued to rage since the British-backed ousting of Muammar Gaddafi in 2011.

The country is now the main launch point for smugglers boats carrying refugees to Europe, with more than 37,000 asylum seekers crossing from Libya to Italy so far this year, and a record of 1,100 dying on the treacherous voyage.

Men carry bags containing dead bodies of migrants as they bury them in a cemetery fin Sabratha, Libya, on 18 April (Reuters)

Charities operating rescue ships in the Central Mediterranean have increasingly come under attack for taking migrants to Italy, being accused of aiding smugglers.

The Migrant Offshore Aid Station (Moas) group appeared before an Italian committee conducting a fact-finding mission on the claims on Thursday, as numerous rescue operations were underway at sea.

Representatives Ian Ruggier told politicians that the maritime rescue coordination centre in Rome (MRCC) has de facto responsibility for the coordination of all search-and-rescue activities and confirmed the group has no contact with gangs in Libya.

We hope that attention can now be diverted back to the unfolding crisis; and that efforts on all sides can be channelled to finding the sustainable, legal and humanitarian solutions hundreds of thousands of people desperately need, a spokesperson for Moas said.

Director Regina Catrambone said that search and rescue operations were not a solution to the crisis and called for lasting solutions, adding: It is time for European and national leaders to step up and provide those alternatives.

The hearing came as the European Commissioner for Migration urged China to stop the export of rubber dinghies used by people smugglers in the Mediterranean.

I requested the support and cooperation from the Chinese authorities in order to track down this business and dismantle it, because what they produce is not serving the common good of the country, Dimitris Avramopoulos said after a meeting Chinese ministers.

A conference by the 28-nation Union for the Mediterranean was also held on Thursday, seeing members meeting in Malta reinstate their commitment to addressing the root causes of irregular migration, including conflict, persecution, poverty and drought.

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EU plans to keep migrants in Libya would trap thousands in 'catastrophic conditions', Germany warns - The Independent

Commercial port city of Misruta a model city

The leaders of two major factions in Libyas civil war have reportedly agreed to hold elections after meeting in the UAE. In separate statements, President Fayez al-Sarraj and General Khalifa Haftar, the leaders of Libyas two main warring factions, said they wanted to work together. It was their first meeting since January 2016, and reports said they agreed on elections in March 2018.

The National Salvation Government have been following carefully the meeting that happened in UAE, and we would like to reiterate that the National Salvation Government is indicting such actions that dont promote the complete inclusion of all Libyan partners, and we do confirm our firm commitment to the Libyan people that we are keen on constructivenational dialogue, and the support of the national salvation government to truthful and transparent efforts which is lead by nationalists, which will lead to an all inclusive Libyanreconciliation, said Khalifa Al Ghweil, the Prime Minister of the National Salvation Government in a statement.

The elections would be a sign of stability in the country that has been racked by violence since the overthrow of long-time autocratic dictator Moammar al-Qaddafi in 2011 after more than four decades. The economy is barely functioning with severe cash shortages. Depositors are only allowed to withdraw small amounts of money once a week.

Libyas Grand Mufti Sheikh Sadiq Al-Gharyani has urged Libyan people to stage mass demonstrations to demand their rights as the countrys economic crisis worsens with no government solution in sight.

The people in general are complaining and feel imminent danger because of conspiracies and plots by the international community and some of our people, he said in his weekly program on Tanasuh TV on Wednesday.

Libya has been racked by violence and fighting between alternate governments since long-time dictator Moammar Qaddafi was forced to leave after a 42-year reign in 2011. But one area, the port city of Misruta has become an oasis of stability and Libyans hope a model for what their country could become.

Misruta is great modern city, it is probably better than Tripoli the capital of Libya in some ways, Abdelsalam Al Ajtal, a local businessman and infrastructure contractor told The Media Line, mentioning Misrutas long coastline and well-known beaches.

Misruta is a commercial port city with more than half a million residents, including Turkmans, Egyptians, Arabs, Amazigh-Berbers, Italians, and others who have migrated from other cities in Libya. Misrutans have a reputation of being friendly.

We have a lot of factions, and people with different ideologies, but I talk to all of them, and I do business with all of them, Mohamed Nahla, a former sales representative at an American oil service company, RedWings told The Media Line.

In contrast to other cities in Libya like Tripoli and Benghazi, Misruta is also known as a safe city.

We go out during the spring time to the gardens, and take our families on picnics where we sit, drink tea, and enjoy a decent conversation. Mohamed Mahmoud a Marketing Specialist at Jahed NGO, an organization handling civil affairs in the city told The Media Line.

Misratans have an organized work force, banking system,and strong independent social and civil societies. We dont really depend on the politicized central bank of Libya, who isnt sending us money to live our daily life; the banks arent functioning, and it has no money, but we created our own network of donors from businessmen, and support from independent underground NGOs, our only concern is stability of our country, Khalifa Alghweil, the Prime Minister of the National Salvation Government told The Media Line. I wish we can burn all the oil, so the Libyans in other citiescan focus on other opportunities, and start working.

Libya has several political factions that led to the creation of a once united coalition of three governments, the Coalition of National Accord, the Transitional Government, and the National Salvation Government. Each group has its own presidential guard and police force.

There is underground youth support for the National Salvation Government and its Prime Minister Engineer and former businessman Khalif Alghweil.

We know his rivals in Tripoli tried to assassinate him, but he needs to stand strong, and come up with a national project(s) plan. Hire professionals to draw a comprehensive plan, then for the sake of God, stick to it. Tameem Abugharsa, a young doctor in Misrata told The Media Line. We are with him, he is the only man that isnt tainted and not-corrupt. We hope he work on reconciliation, security and stability.

There is a call among a large sector of young Libyans for unity and avoiding more bloodshed by refusing to belong to any political parties

We were deceived right after the death of the Moammar Qadhaffi, by several political groups who were only interested in gaining power and control over the main institutions in the country to benefit themselves, or their groups, Ali a young man working in the oil industry who asked not to use his last name, told The Media Line. We believed the Muslim Brothers Leaders because we thought that coming from a religious background they will not be corrupt. We also believed that the educated liberals who spent most of their life in the West will bring stability but we were wrong.

Read more here:
A Different Face Of Libya - The Media Line

BBC News

Talks between rival Libya factions 'make some progress' - BBC News BBC News Talks between the two largest factions in war-torn Libya have made progress in reaching a deal to resolve the country's political and economic crises, ... and more »

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Talks between rival Libya factions 'make some progress' - BBC News - BBC News

Socit Gnrale to Pay $1.1 Billion to Settle Dispute With Libya Fund Wall Street Journal (subscription) PARISSocit Gnrale SA said Thursday it had agreed to pay 963 million ($1.1 billion) to settle claims that it paid a middleman alleged bribes to secure business from Libya's sovereign-wealth fund during the final years of dictator Moammar Gadhafi ...

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Socit Gnrale to Pay $1.1 Billion to Settle Dispute With Libya Fund - Wall Street Journal (subscription)