Oil Traders Expect Libya Supply To Restart

23/08/2011

By Kev Kiernan

The price of oil has fallen as developments in Libya encourage commodity traders to believe the country's supply is closer to being restored.

Dictator Muammar Gaddafi's 41-year rule and the accompanying regime appears to be nearing its end, leading world markets to think the country's oil will flow once again, topping up the world supply.

A barrel of Brent crude in London fell in price by around 1 per cent to $107.9, although in earlier trading prices fell by as much as 3 per cent.

Oil has been rising in price since February's uprising in Libya sparked civil war. Production was restricted in the north African nation which is the world's twelth biggest exporter and has significant reserves.

Pre-civil war, the refineries in Libya produced 1.6 million barrels a day, around 2 per cent of global supply. Then, oil cost $84 a barrel but by the end of April it reached $110.