08:46 AM EDT, 08/27/2024 (MT Newswires) -- Oil prices eased early on Tuesday, edging down after a day-prior gain of 3.5% spurred by reports one of Libya's competing governments is shutting off oil exports in a fight to control the country's central bank.

West Texas Intermediate crude oil for October delivery was last seen down US$0.51 to US$76.91 per barrel, while October Brent crude, the global benchmark, was down US$0.46 to US$80.97.

The status of Libya's 1.1-million barrels per day of exports is in doubt as the country's eastern government, which controls the bulk of the country's oilfields, on Monday declared force majeure on exports as it seeks to gain control of the country's central bank and oil revenue, Bloomberg reported.

The shutdown of exports removes barrels from a tight physical market, but the country has been an unreliable supplier amid its domestic squabbles.

"Libya's Eastern government said it would stop all oil production and exports, as the struggle with its Tripoli-based rival for control of the central bank and the nation's oil wealth heats up. This potentially threatens another conflict which, during the past decade, has seen production from this oil-rich nation gyrate between near-zero barrels to around 1.2 million barrels per day," Saxo Bank noted.

Still, the removal of Libyan supply only pushed oil prices to a nine-day high as China's sagging economy remains in focus on weak demand growth from the No.1 importer, while OPEC readies to return more than two-million barrels per day of production cuts to the market in the fourth quarter, depending on market conditions.

"Supply concerns surrounding oil-producing regions ... tend to provide temporary price support unless output is meaningfully impacted, consequently, it will probably not be long before the focus shifts back to the underlying supply-demand oil balance effectively capping any attempt to send prices spiraling out of control," PVM Oil Associates noted.