(Bloomberg) -- Oil plunged as Libyan factions reached a “compromise” on appointing new leadership for the OPEC member’s central bank, an initial step that could help eventually return some of the country’s recently shuttered oil production.

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West Texas Intermediate slipped more than 2% to settle below $70 a barrel, with Brent crude falling to settle around $73 a barrel. Prices hit new lows for the day after a UN mission to Libya said representatives from the country’s rival eastern and western administrations reached an agreement on procedures for appointing officials for the bank.

Any revived Libyan production would return to a market already beset by concerns that tepid consumption in the US and China and plans by OPEC+ to bring back some output are setting up a potential glut of crude. The People’s Bank of China’s adrenaline shot for the economy boosted oil prices on Tuesday, though it isn’t yet clear whether it will translate to higher energy demand in the world’s biggest crude importer.

“Today’s weakness suggests demand concerns linger,” even as potential supply disruptions in the Middle East stay near the forefront of investors’ minds, Fawad Razaqzada, an analyst at City Index and Forex.com, said in a note.

In the US, data released Wednesday showed crude inventories fell 4.47 million barrels last week to the lowest since April 2022. Futures largely took the drawdown in stride after an industry group on Tuesday had projected a similar-sized drop.

Geopolitics also remained in focus as Iranian President Masoud Pezeshkian said that Israeli attacks in Lebanon “cannot go unanswered.”

Crude remains down this quarter on the dour outlook in Asia’s largest economy and the prospect of higher supply from OPEC and its allies. The producer group on Tuesday doubled down on its outlier view that global oil demand will keep growing to the middle of the century.

“The market remains at risk of a supply glut if OPEC+ proceeds with plans to return some of its sidelined production,” Rabobank analysts Joe DeLaura and Florence Schmit said in a report. “Geopolitical issues in the Middle East still support upward price risk in the long term.”

Meanwhile, Hurricane Helene is sweeping past Mexico’s Yucatan Peninsula on its way to a Thursday collision with Florida, where it has triggered the evacuation of some oil and natural gas platforms.