LONDON: Oil prices slipped on Thursday, March 3, dropping by more than $3 briefly before recovering, after the Arab League said a peace plan for Libya was under consideration.
The uprising against Muammar Gaddafi has reduced Libya's oil production by around half, industry officials estimate, and anything that helped restore output would help calm oil markets.
But traders were sceptical over the prospect of any immediate end to fighting in Libya, where Gaddafi faces an increasingly organised and confident rebel army.
Iraqi Oil Minister Abdul-Kareem Luaibi said the Organization of the Petroleum Exporting Countries was concerned about the turmoil in Libya but had sufficient oil to cover any shortfall caused by the rebellion there.
Brent crude futures for April hit an intra-day low of $113.09 a barrel, down over $3 on the day, before recovering to around $115.80 by 1000 GMT.
U.S. crude futures were down 35 cents at $101.88 by 1000 GMT, after hitting a low of $100.37. It settled at $102.23 a barrel in the previous session, ending above $100 for the first time since September 2008.
"The 'peace plan' for Libya obviously knocked the market lower but it doesn't seem to be having more than a passing impact on prices, which will probably head higher again," said Cartsen Fritsch, analyst at Commerzbank in Frankfurt.
Arab League Secretary-General Amr Moussa said on Thursday a peace plan for Libya from Venezuela's President Hugo Chavez was "under consideration".
News network Al Jazeera said earlier the plan would involved a commission from Latin America, Europe and the Middle East trying to reach a negotiated outcome between Libyan leader Muammar Gaddafi and rebel forces for this North African oil-producing country.
But Moussa said he did not know if Gaddafi accepted the plan and, when asked if he had agreed the plan, Moussa replied: "No."
Tim Riddell, head of technical analysis at ANZ in Singapore, expressed some scepticism: "If it's coming out of Chavez, it might not have a great degree of substance," he said.
''
RISK OF CONTAGION
Revolt has ripped through the world's 12th-largest oil exporter and knocked out around half of its 1.6 million barrels per day (bpd) output.
Libyan output has fallen to 700,000-750,000 barrels per day (bpd) as most foreign oil workers had taken flight, according to Shokri Ghanem, the head of the North African producer's state oil company..
Concern the conflict might disrupt more Libyan output and that protest in the region may interrupt supply from other major producers has spurred oil prices to two-and-half-year highs. Brent rose to near $120 a barrel on Feb. 24.
A drawn-out battle between rebels and pro-Gaddafi supporters in Libya could push oil prices above $130 a barrel, Ghanem said.
"The market still sees the risk of contagion to neighbouring countries like Algeria which produced 1.2 million barrels per day (bpd) in January," a BNP Paribas research note said.
"Should Algeria be affected, OPEC's spare capacity stands to be significantly curtailed if it were to meet the additional shortfall in supply." - Reuters
The uprising against Muammar Gaddafi has reduced Libya's oil production by around half, industry officials estimate, and anything that helped restore output would help calm oil markets.
But traders were sceptical over the prospect of any immediate end to fighting in Libya, where Gaddafi faces an increasingly organised and confident rebel army.
Iraqi Oil Minister Abdul-Kareem Luaibi said the Organization of the Petroleum Exporting Countries was concerned about the turmoil in Libya but had sufficient oil to cover any shortfall caused by the rebellion there.
Brent crude futures for April hit an intra-day low of $113.09 a barrel, down over $3 on the day, before recovering to around $115.80 by 1000 GMT.
U.S. crude futures were down 35 cents at $101.88 by 1000 GMT, after hitting a low of $100.37. It settled at $102.23 a barrel in the previous session, ending above $100 for the first time since September 2008.
"The 'peace plan' for Libya obviously knocked the market lower but it doesn't seem to be having more than a passing impact on prices, which will probably head higher again," said Cartsen Fritsch, analyst at Commerzbank in Frankfurt.
Arab League Secretary-General Amr Moussa said on Thursday a peace plan for Libya from Venezuela's President Hugo Chavez was "under consideration".
News network Al Jazeera said earlier the plan would involved a commission from Latin America, Europe and the Middle East trying to reach a negotiated outcome between Libyan leader Muammar Gaddafi and rebel forces for this North African oil-producing country.
But Moussa said he did not know if Gaddafi accepted the plan and, when asked if he had agreed the plan, Moussa replied: "No."
Tim Riddell, head of technical analysis at ANZ in Singapore, expressed some scepticism: "If it's coming out of Chavez, it might not have a great degree of substance," he said.
''
RISK OF CONTAGION
Revolt has ripped through the world's 12th-largest oil exporter and knocked out around half of its 1.6 million barrels per day (bpd) output.
Libyan output has fallen to 700,000-750,000 barrels per day (bpd) as most foreign oil workers had taken flight, according to Shokri Ghanem, the head of the North African producer's state oil company..
Concern the conflict might disrupt more Libyan output and that protest in the region may interrupt supply from other major producers has spurred oil prices to two-and-half-year highs. Brent rose to near $120 a barrel on Feb. 24.
A drawn-out battle between rebels and pro-Gaddafi supporters in Libya could push oil prices above $130 a barrel, Ghanem said.
"The market still sees the risk of contagion to neighbouring countries like Algeria which produced 1.2 million barrels per day (bpd) in January," a BNP Paribas research note said.
"Should Algeria be affected, OPEC's spare capacity stands to be significantly curtailed if it were to meet the additional shortfall in supply." - Reuters
No comments:
Post a Comment