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| Oil prices fall as rebels close in on Libyan capital | Oil prices fall as rebels close in on Libyan capital |
| (40 minutes later) | |
| Oil prices have fallen on speculation the conflict in Libya may be coming to an end as rebels entered the capital Tripoli. | Oil prices have fallen on speculation the conflict in Libya may be coming to an end as rebels entered the capital Tripoli. |
| Brent crude futures fell $1.54 to $107.08 a barrel, while US light crude fell 0.7% to $81.65 in early Asian trade. | Brent crude futures fell $1.54 to $107.08 a barrel, while US light crude fell 0.7% to $81.65 in early Asian trade. |
| Markets were hoping an end to the conflict will see Libya's oil exports restored, increasing global supplies. | Markets were hoping an end to the conflict will see Libya's oil exports restored, increasing global supplies. |
| Libya is the world's 12th-largest oil exporter. | Libya is the world's 12th-largest oil exporter. |
| Analysts said prices are likely to fall further as the political situation in the country unfolds. | Analysts said prices are likely to fall further as the political situation in the country unfolds. |
| "As the world wakes up to the news, we will see more momentum in the decline of oil prices," Jonathan Barratt of Commodity Broking told the BBC. | "As the world wakes up to the news, we will see more momentum in the decline of oil prices," Jonathan Barratt of Commodity Broking told the BBC. |
| Increased supplies? | |
| Before the start of the conflict, Libya produced 1.6 million barrels per day of crude oil, or about 2% of the world's output. | Before the start of the conflict, Libya produced 1.6 million barrels per day of crude oil, or about 2% of the world's output. |
| But as the political unrest in the country intensified, the majority of that production was hit, taking a toll on global oil supply. | But as the political unrest in the country intensified, the majority of that production was hit, taking a toll on global oil supply. |
| Analysts said as the conflict ends, production numbers are likely to rise again. | Analysts said as the conflict ends, production numbers are likely to rise again. |
| "Once they get back to recovery mode, a million barrels per day are expected to enter the global supply," said Commodity Broking's Mr Barratt. | |
| "This will add weight to the decline in oil prices that we have seen recently." he added. | "This will add weight to the decline in oil prices that we have seen recently." he added. |
| However, some analysts said that even though the Libyan conflict seemed to heading towards an end, there was still uncertainty about how fast the country's oil production can be restored to the pre-conflict levels. | |
| "It will take a long time for them to repair the production facilities and get back on track," Avtar Sandhu of Phillip Futures told the BBC. | |
| "What we are seeing today is more of a psychological selling," he added. | |
| Macroeconomic factors | Macroeconomic factors |
| Oil prices have also been hit by concerns that demand may be hurt by a slowdown in the global economy. | Oil prices have also been hit by concerns that demand may be hurt by a slowdown in the global economy. |
| There have been growing concerns that the US may be slipping back into a recession and that Europe's debt crisis will hurt growth in the region. | There have been growing concerns that the US may be slipping back into a recession and that Europe's debt crisis will hurt growth in the region. |
| Analysts said as two of the world's biggest economic zones struggle to boost growth, oil prices are likely to slide. | Analysts said as two of the world's biggest economic zones struggle to boost growth, oil prices are likely to slide. |
| "Until the US and Europe can come up with a long term solution for sustainable growth, markets are likely to be subdued," Phillip Futures's Mr Sandhu said. | |
| "In the long run, macroeconomic issues will play a huge role in determining which way the oil prices are headed." he added. |