UpdateBrent crude falls $3/bbl on hopes over Libya oil exports

22 August 2011 08:05  [Source: ICIS news]

(updates oil prices, adds details throughout)

SINGAPORE (ICIS)--Brent crude oil futures fell more than $3/bbl on Monday on hopes that Libya would soon fully resume oil production, as its six-month civil war appears to be drawing to a close.

On Sunday rebels took control of the Libyan capital, Tripoli, and there was speculation that it will only be a matter of time before the regime of President Muammar Gaddafi falls.

At 07:00 GMT on Monday, October Brent crude on London’s ICE futures exchange was trading at $105.40/bbl, down by $3.22/bbl from the previous close. Earlier, the North Sea benchmark fell to a session low of $105.15/bbl, down by $3.47/bbl.

Meanwhile, September NYMEX light sweet crude futures (WTI) were at $81.34/bbl, down by $0.92/bbl from the previous close. The US September crude contract expires on Monday.

Ending the conflict could see Libya's oil exports restored, increasing global supplies, according to analysts.

Libya is the world's 12th-largest oil exporter, and normally produces about 1.6m bbl/day of oil.

Since the civil unrest began, oil production has declined to 200,000-300,000 bbl/day, according to the Commonwealth Bank of Australia in a research note.

“Libya might return to full production within six to 12 months… This would ease the tight supply of Brent grade crude and put downward pressure on the Brent premium over WTI,” it said.

Crowds gathered in Tripoli’s main square on Monday morning to celebrate the end of Gaddafi’s 42 year-old dictatorship, according to various media reports.

One of Gaddafi's sons has been captured by rebels, media reports said.

US President Barack Obama said in a statement late on Sunday that the Gaddafi regime “is showing signs of collapsing”.

"The future of Libya is now in the hands of the Libyan people," Obama added.

"The Gaddafi regime is clearly crumbling," said a statement published on the NATO website on Monday.

"The sooner Gaddafi realises that he cannot win the battle against his own people, the better," NATO said.

($1 = €0.70)

By: Nurluqman Suratman

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