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Oil falls on profit taking, Libya hopes
Source: Agencies |
March 4, 2011, Friday
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OIL prices retreated yesterday from two-year highs set a day before as investors took out profits and hoped that the conflict in Libya might be resolved by international mediation.
Benchmark West Texas Intermediate for April delivery gave up 32 cents to settle at at US$101.91 a barrel on the New York Mercantile Exchange.
In London, Brent crude fell US$1.56 to settle at US$114.79 per barrel on the ICE Futures Exchange.
Oil rose US$2.60 per barrel Wednesday and is up about US$17 per barrel over two weeks. Analysts say traders have mostly priced in the loss of Libyan oil production and are taking profits.
Oil prices have remained near highs last seen in 2008 as fighting between rebels and government forces in Libya intensified amid efforts to reach a mediated resolution to the conflict that has cut crude supplies by more than half from the OPEC nation.
President Hugo Chavez has spoken with Moammar Gadhafi about creating a bloc of friendly countries to help mediate a resolution to Libya's crisis, Venezuela's information minister said. He said Gadhafi is supporting the plan.
"Reports on a peace plan for Libya have put pressure on oil prices," said analysts at Commerzbank in Frankfurt. "This dip in is only temporary in our view. It is doubtful that the protesters in Libya will agree to enter negotiations with Gadhafi."
On yesterday, forces loyal to Gadhafi continued to battle for control of the country with mutinous army units and other rebels. Libya, which sits on the most reserves in Africa and is a major exporter to Europe, continues to produce oil, though experts say it's unclear how much will eventually make it to international ports.
The fighting, combined with international sanctions, could keep companies from doing business with Libya. Refineries in Europe are finding other sources of crude.
Oil traders say they have mostly priced in the loss of Libyan production. But the so-called "fear premium" could rise further if similar pro-reform movements escalate in neighboring countries such as Algeria, Iran and Saudi Arabia.
In other Nymex trading for April contracts, heating oil fell less than a penny to settle at US$3.049 per gallon; gasoline futures lost less than a penny to settle at US$3.026 per gallon; and natural gas gave up 4 cents to settle at US$3.778 per 1,000 cubic feet.
Benchmark West Texas Intermediate for April delivery gave up 32 cents to settle at at US$101.91 a barrel on the New York Mercantile Exchange.
In London, Brent crude fell US$1.56 to settle at US$114.79 per barrel on the ICE Futures Exchange.
Oil rose US$2.60 per barrel Wednesday and is up about US$17 per barrel over two weeks. Analysts say traders have mostly priced in the loss of Libyan oil production and are taking profits.
Oil prices have remained near highs last seen in 2008 as fighting between rebels and government forces in Libya intensified amid efforts to reach a mediated resolution to the conflict that has cut crude supplies by more than half from the OPEC nation.
President Hugo Chavez has spoken with Moammar Gadhafi about creating a bloc of friendly countries to help mediate a resolution to Libya's crisis, Venezuela's information minister said. He said Gadhafi is supporting the plan.
"Reports on a peace plan for Libya have put pressure on oil prices," said analysts at Commerzbank in Frankfurt. "This dip in is only temporary in our view. It is doubtful that the protesters in Libya will agree to enter negotiations with Gadhafi."
On yesterday, forces loyal to Gadhafi continued to battle for control of the country with mutinous army units and other rebels. Libya, which sits on the most reserves in Africa and is a major exporter to Europe, continues to produce oil, though experts say it's unclear how much will eventually make it to international ports.
The fighting, combined with international sanctions, could keep companies from doing business with Libya. Refineries in Europe are finding other sources of crude.
Oil traders say they have mostly priced in the loss of Libyan production. But the so-called "fear premium" could rise further if similar pro-reform movements escalate in neighboring countries such as Algeria, Iran and Saudi Arabia.
In other Nymex trading for April contracts, heating oil fell less than a penny to settle at US$3.049 per gallon; gasoline futures lost less than a penny to settle at US$3.026 per gallon; and natural gas gave up 4 cents to settle at US$3.778 per 1,000 cubic feet.
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