LP:Brent oil trading near $109 as situation in Libya remains uncertain
Brent oil futures open today’s trading session hovering near $109, supported by a weaker US dollar whilst the situation in Libya has many investors uncertain about the short term future of the country, which could affect oil production figures and boost prices.
Latest Brent Oil Price
In London, Brent crude oil futures for October 2011 delivery was trading at $109.18 a barrel, 07.25 GMT this morning on the ICE Futures Exchange.
Fighting in Libya
Hopes for a rapid restart of oil production in Libya are fading as fighting continues and experts warn it could take over a year for full crude oil output to return to the country.
Last night rebel forces claimed to be in control of 90 percent of Tripoli. Many of Gaddafi’s forces were said to be downing weapons, stripping off their uniforms and surrendering.
But there were reports that there were still pockets of resistance and that loyalists were raining fire on Gaddafi’s vanquished stronghold.
“For the Gaddafi regime, this is the final chapter – the end is near and events are moving fast. What’s clear to everyone is that Gaddafi is history and the sooner he realises it, the better. The remnants of the regime are desperate.” said Nato spokesman Oana Lungescu.
Meanwhile, Gaddafi’s old ally Hugo Chavez, the Venezuelan president, reaffirmed his support for the fallen dictator.
Since fighting began in February, the OPEC nation’s crude output has fallen from 1.5 million barrels a day to 60,000 barrels and the country’s oil infrastructure has been damaged.
Goldman Sachs said it was sticking by its forecast that Libya’s oil production will average 250,000 barrels a day next year.
“It will be challenging to bring the shut-in production back online. We don’t change our production forecast until we have more clarity on the situation.” Goldman Sachs said in a report.
US Dollar Weakness
Meanwhile, the US dollar lost some ground in currency market trading, boosting oil prices and other commodities. The ICE US Dollar Index, which tracks the US dollar against six major world currencies was at 73.955 this morning after closing yesterday under 74, at 73.961.
