Oil prices mixed on Libya unrest, before US data

9th March 2011, Comments 0 comments

World oil prices were mixed Wednesday as traders tracked the supply situation amid ongoing unrest in Libya and awaited energy inventory data in the United States.

In early London trade, Brent North Sea crude for delivery in April rose 69 cents to $113.75.

New York's main contract, light sweet crude for April, fell 22 cents to $104.80 per barrel.

"Despite the continued fighting in Libya, making a normalisation of Libya's oil production soon an unlikely prospect, concerns about supply tightening have eased a little," Commerzbank analyst Carsten Fritsch said.

Saudi Oil Minister Ali Naimi has downplayed market fears about global shortages, saying Tuesday that his kingdom has extra output capacity of 3.5 million oil barrels per day.

Oil prices spiked to 2.5-year highs in recent days amid escalating violence and supply shortfalls in Libya, a major producer and exporter of crude.

"The rally of crude oil prices is not being driven by an actual tightening of supply but rather the fear that the unrest will spread to other oil producing countries," said Fritsch.

"Should another country on the scale of Libya also exit the market, Saudi Arabia's spare capacities would be likely to fall to a critical level of less than two million barrels a day."

The energy market will later Wednesday digest weekly inventory data from the United States, the world's largest consumer of oil.

© 2011 AFP

0 Comments To This Article