THE PRICE OF Brent crude oil dipped 1.8 per cent to below $107 a barrel on the ICE Futures exchange in London today after Libyan rebels moved into the country’s capital.
Rebels have taken control of a large part of the capital, after Colonel Muammar Gaddafi’s defences collapsed overnight. The Libyan leader’s whereabouts are still unknown, but two of his sons have reportedly been captured by rebel forces.
The oil price fell amid optimism that Libyan oil production would resume earlier than expected. Technicians have been called to Eni’s plant in Benghazi and Italy’s Foreign Minister Franco Frattini said today that the company – the largest foreign producer in Libya – is preparing to resume its oil and natural gas operation in Libya.
Although oil from Libya accounted for less than 2 per cent of the world’s demand, the resumption of its production means more oil will be on the market, driving down the price. Some 85 per cent of Libyan oil was exported to Europe.
Meanwhile, oil rose slightly on New York’s Mercantile Exchange to $82.76 a barrel. The US is less reliant on Libyan oil than Europe, and the rise in oil prices there today is thought to reflect concerns over US supplies, according to the AFP.
Libyan oil production has fallen significantly since anti-Gaddafi violence broke out in the middle of February.
- Additional reporting by the AP
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