Oil Price Predicted To Fall With Gaddafi

22/08/2011

With Muammar Gaddafi's 41 years in power in Libya seemingly about to be ended by the ongoing battle for Tripoli, markets can expect to see a fall in the global oil price, one expert has predicted.

However, as rebels flush out the last pockets of forces loyal to the erstwhile dictator, independent analyst Andrew Lipow has said that the full impact may not been seen for several months.

Rebel troops swept into the Libyan capital overnight to little resistance and have arrested Gaddafi's son and Saif al-Islam, although heavy clashes have been reported near Gaddafi's headquarters.

Lipow said that prices should drop in the short term, but the estimated $10 to $20 spike in prices brought about the conflict will take longer to fall back.

The suspension of Libyan exports following the escalation of the conflict in February, coupled with the general uncertainty in the region, led to the upward pressure.

Andrew Lipow is an analyst and president of consultancy firm Lipow Oil Associates.

Oil cost around $84 US a barrel at the start of hostilities, before it quickly spiked above $93 and kept rising to a high above $110 by the end of April.