The prices of crude oil lowered as supply risks began to ease in the global commodities market. Brent crude plunged by 2.5% to $71.19 per barrel. US benchmark West Texas Intermediate (WTI) fell by 2.5% to $67.88 per barrel.

Supply concerns eased in Libya amidst lingering demand worries in China despite Beijing efforts to stimulate the economy. The prospect of rising supply from Libya and Saudi weighed on oil prices, with market participants ignoring a sharp fall in weekly inventory numbers in the United States.

Recent reports suggest that representatives from Libya’s rival eastern and western administrations reached a “compromise” on leadership for the central bank, paving the way to a potential revival in Libyan oil production.

Also, indication emerged that Saudi Arabia could focus on regaining the market share and start to unwind voluntary production cuts from December. The expectation that oil production will return to normal levels with the stabilization of the country put downward pressure on oil prices.

Analysts said stimulus plan announced in China will not be enough to stir economic movement continues to impact oil price decline. Analysts worry that weak crude oil demand in the world’s largest oil importing country will lower global demand.

Experts say the People’s Bank of China (PBoC) needs to announce a more concrete fiscal approach to support economic growth in the nation.

Meanwhile, the fall in US commercial crude oil reserves limited downward price movements by reflecting market perceptions of a stronger domestic demand. Data from the US Energy Information Administration (EIA) released late Wednesday showed a significant drop in US crude oil inventories.

US commercial crude stocks fell by around 4.5 million barrels to 413 million barrels for the week ending Sept. 20, higher than the market prediction of about 1.3 million barrels drawn.