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A huge oil producer is ramping up production — but there's reason to remain cautious

"...we strongly caution against uncorking the champagne just yet."

Gen. Khalifa Hafter.

Oil prices have cratered in recent days following a slew of news, including renewed oversupply fears from Libya.

Last week, the country's Sharara and El Feel oilfields, which can pump 400,000 barrels per day, came back online.

The National Oil Company (NOC) said on Monday that Libya's oil production jumped to 760,000 bpd — the highest level since December 2014. Chairman

And finally, there have been reports that talks between leaders of the two largest rival factions, the head Fayez al-Sarraj and General Khalifa Haftar, have "made some progress."

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Market sentiment and oil prices dove amid renewed oversupply fears given that these developments appear to be a positive sign for Libya's oil sector.

However, there are reasons to remain cautious about a "sustainably strong" return of Libyan oil, said

"[W]e strongly caution against uncorking the champagne just yet as some of the most powerful armed actors are not party to the agreement (most notably the western militias) and the previous political settlements have proved to be short-lived," she said in a note.

Libya's oil production has sputtered amid the ongoing domestic political, economic, and security challenges since Muammar Gaddafi was overthrown in 2011 as rival governments and numerous armed groups have competed for power.

Notably, Libya's production comeback hasn't been the only recent bearish news for oil prices.

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Oil prices sank to their lowest level since November 2016 on Thursday.

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