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Oil soars on Libya violence, WTI shorts cover

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posted on Feb, 21 2011 @ 05:51 PM
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LONDON/NEW YORK (Reuters) – Brent crude oil prices hit $108 a barrel for the first time since 2008 on Monday on fears that spiraling violence in Libya could lead to wider supply disruptions from the OPEC member.



U.S. oil prices led the rally to jump by more than $5, the most in over two years, as traders also rushed to cover short positions in the key Brent/WTI spread, which had blown out to a record $16 a barrel. The April spread narrowed to $10 during the day, but widened to over $12 in after-hours trade.



The focus was on deadly clashes in Libya, where one oil firm was shutting down some 100,000 barrels per day (bpd) of production and others evacuated staff. The leader of the Al-Zuwayya tribe threatened oil exports to the West would be cut off unless authorities stopped violence.


Ive been kind of keeping track of gas prices around my area, and they have increased, but nothing extreme yet.

Im not sure how much of a producer Libya is either, compared to other countries. If unrest continues to spread across the Middle East, I would expect prices to go higher and higher.


In Libya, scores were killed in anti-government protests as one of the region's bloodiest revolts hit Tripoli for the first time, while army units defected to the opposition and Gaddafi's son vowed to fight to the last man standing.


The situation seems to be getting worse and worse. Im guessing Gaddafi wont step down until hes dead.




posted on Feb, 21 2011 @ 07:56 PM
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Those fuel prices... you'll see changes within the week.

Futures are up almost $0.20 virtually overnight.
edit on 21-2-2011 by Scalded Frog because: typo



posted on Feb, 21 2011 @ 09:16 PM
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Libya holds 3.3% of the World's oil.

It supplies mostly Europe with oil, but only supplies 2% of the World's actual oil consumption.

So assuming the World's oil supply declines 2%, OPEC will increase production to cover shortages .. mostly because the price won't decline..

So oil will see a significant increase due to speculation, oil production won't decline, and all the other major oil producers will reap the benefits.


Libya also produces .58% of the World's natural gas, but we will still see natural gas prices increase.

edit to add: The US saw the largest percentage increase in price, and we don't import from Libya. Go figure.
edit on 2/21/2011 by Rockpuck because: (no reason given)



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