Oil Industry Braces for Fallout from Libya
The Associated Press reports that oil consuming nations have emergency reserves they can use to stabilize markets in case the violence in Libya and the wider Middle East escalates and crimps production. But international executives and analysts meeting in London were nervously watching developments in the oil-rich region, worried about the sharp shock political unrest is giving to crude oil prices. Oil prices jumped on Monday because of the ongoing turmoil in Libya, where Moammar Gadhafi''s son, Seif al-Islam Gadhafi, warned protesters on Sunday that they risked igniting a civil war in which Libya''s oil wealth will be burned. By early afternoon in Europe, benchmark crude for March delivery was up $3.10 to $89.30. Libya alone exports at least 1 million barrels of crude a day. Even more worrying for markets is potential contagion, or the spreading of the political violence to other countries in the Organization of Petroleum Exporting Countries, key exporters Saudi Arabia and Kuwait are considered potential flashpoints.