Crude down in Asia as Libya rebels enter Tripoli
SINGAPORE – Crude fell in Asian trade Monday as rebels seized parts of Libya’s capital and the fate of leader Moamer Kadhafi hung in the balance.
Brent North Sea crude for October delivery plunged $2.37 to $106.25 from Friday’s close.
New York’s main contract, light sweet crude for September delivery slid 25 cents to $82.01 a barrel after rising to above $83 in early morning trade driven partly by concerns over US oil demand.
“This is really the main news event,” Victor Shum, an analyst with energy consultancy Purvin and Gertz in Singapore, said of the situation unravelling in Libya.
“Rebels have entered Tripoli… there have also been reports Kadhafi will get out of the country,” Shum told Agence France-Presse.
Libya, a key crude-exporting nation that was producing some 1.49 million barrels per day before the rebellion broke out in mid-February, has seen its output slashed significantly since the revolt began.
About 85 percent of Libyan oil output was exported to Europe until the revolt disrupted the country’s production.
Brent crude is under selling pressure as a resolution of the crisis in Libya, which will likely see the country gradually resuming full scale oil production, will mean more supplies to the European markets, analysts said.
Libyan rebels surged into Tripoli Sunday in a final drive to oust Kadhafi as they seized swathes of the capital, including symbolic Green Square, and arrested the strongman’s son, Seif al-Islam.
However, senior rebel figure Mahmud Jibril said there were still pockets of resistance in and around Tripoli and warned his forces to be cautious.
“The fight is not over yet,” he said on rebel television Al-Ahrar. “God willing, in few hours our victory will be complete.”
Meanwhile, US President Barack Obama said Sunday Kadhafi’s regime had reached a “tipping point” and the Libyan strongman must leave now to avoid further bloodshed.
Apart from the situation in Libya, New York crude erased earlier gains as traders worried that US demand will be hit after recently released data indicated the world’s biggest economy is stalling, analysts said.
Phillip Futures said in a commentary that US crude was “under pressure due to US economic woes and concerns over European debt.”
The US is the world’s biggest oil consuming nation.
