LONDON, Sept 4 Reuters Oil prices fell slightly on Wednesday, hovering at their lowest levels since December after plunging more than 4 the previous day on signs of a weak global economy, lacklustre oil demand, and expectations of an end to a dispute halting Libyan exports.

The oil price decline came during a broader selloff in world markets, with shares falling and expectations of fading global growth hitting riskier assets.

That poses a challenge for OPEC, which Reuters reported last week was still set to proceed with a planned oil output hike from October. Any further increase in supply could push prices even lower.

Brent crude futures fell 17 cents, or 0.2, to 73.58 by 0916 GMT, after the previous session39;s fall of 4.9. U.S. West Texas Intermediate crude futures were down 20 cents, or 0.3, at 70.14, after dropping 4.4 on Tuesday.

Both benchmarks had fallen by 1 in earlier trading on Wednesday, amid expectations of a potential deal to resolve the dispute in Libya, said Toshitaka Tazawa, an analyst at Fujitomi Securities Co Ltd, referring to a clash between rival factions over control of oil revenue that had cut the North African39;s crude output by half and curbed exports.

Libya39;s two legislative bodies agreed on Tuesday to jointly appoint a central bank governor within 30 days, potentially defusing the battle. The central bank is the sole legal repository for oil revenue and pays state salaries across Libya.

Oil exports at major Libyan ports were halted on…