Crude
prices tumbled in Asian trade Monday on prospects of Libyan oil production
getting fully back on stream, after a rebel advance deep into Tripoli left
Moamer Kadhafi's fate in the balance.
Brent North Sea crude for October delivery plunged $2.74 to
$105.88 a barrel from Friday's close.
New York's main contract, light sweet crude for September
delivery, slid 78 cents to $81.48 a barrel. It had risen to more than $83 in
early morning trade, but was driven down partly by concerns about the US
economy.
"This is really the main news event," Victor Shum,
an analyst with energy consultancy Purvin and Gertz in Singapore, said as
veteran strongman Kadhafi's four-decade rule in Libya appeared to unravel.
"Rebels have entered Tripoli... there have also been
reports Kadhafi will get out of the country," Shum told AFP.
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 from the North Sea would be particularly affected
by the likelihood of Libya gradually resuming supplies to the European market,
analysts said.
"The impact of that on the oil market should be bearish
because going forward, Libyan oil production will come back on stream and that
should put downward pressure on oil," said Shum.
"It's really the geopolitical issue in Libya on top of
all the other macroeconomic factors."
Apart from the situation in Libya, New York crude erased
earlier gains as traders worried that US demand will be hit after recent 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 United States is the world's biggest oil-consuming
nation.
Source : AFP
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