October 21, 2011
Now What? With Colonel Gadhafi Gone, what about OPEC production?
See in Forbes "The Death of Gadhafi and the Future of Oil Markets". Excerpts:
Libyan oil production hit 1.559 million barrels of daily production back in 2010, according to OPEC. That was about 2% of global production and 5% of OPEC production. Civil war, though, disrupted flows to the point where in August production averaged 7 barrels a day. Over the third quarter, production averaged 151,000 barrels per day.
While it is hard to estimate the effect of Gadhafi’s death on oil markets, a look at WTI and Brent prices show a marked fall starting about 8 AM in New York, when the news initially surfaced. Markets bounced off their lows and by 2:26 PM, Brent was trading at $108.97 while WTI at $85.13.
Commodity analysts at JPMorgan note that news coming out of Libya in the last 6 weeks, practically all of it positive, suggest “the oil market is discounting a relatively rapid return of at least the first 700,000 barrels per day of production.”
Posted by JD Hull at October 21, 2011 11:00 PM