Libya's oil production fell to less than 400,000 barrels a day after foreign companies pulled out their staff, the chairman of the country’s state-run National Oil Corp. The North African country had no intention of breaking commitments with foreign companies and called on them to send their employees back to resume work. Libya may otherwise award new oil and gas concessions directly to companies in countries such as China and India in order to raise production. Oil fell yesterday after the Libyan regime said it would cease military operations and begin talks with the rebels. Crude for April delivery dropped 35 cents to settle at $101.07 a barrel on the New York Mercantile Exchange. Futures were up as much as 2.2 percent at $103.66 before the Libyan announcement.
Saturday, March 19, 2011
Libya Oil Chief Says Crude Production ‘Could Reach a Halt’ Due to Conflict
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3 comments:
situations like this can usually mean that a price shock is dwelling in the near future. however in his recent address to the nation, president Obama has reassured the U.S. that he has made arrangements with OPEC to produce more oil for the U.S. on a temporary basis. he has also agreed to implement a rather large off shore drilling operation that will further reduce our countries independence on foreign oil. with these measures in place the price of oil should remain somewhat unaffected by the situation in Libya.
The situation in Libya has created a very uneasy situation dealing with oil. More volatility than normal will be evident in oil prices in the near future until the conflict is resolved in Libya. For now we will have to wait on decisions to be made by the International community and by Libya; once this is done, there will be more confidence as to what direction the oil production in Libya is headed.
It seems like despite any arrangements made to keep a steady supply of oil coming into the United States the oil prices have still gone up drastically. It seems like the lack of oil due to Libya's revolution, even while the OPEC countries may have come through on their arrangement, has effected the perceptions of the american populous and allowed gas companies to raise prices simply due to our expectations.
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