Good news for Libyan rebels cheers global markets
A tattered tri-colored pre-Gaddafi Libyan flag used by rebels as the symbol of their uprising flies on a rebel truck on the road to Brega, Libya.
Stacey Vanek Smith: On business and economics. Anticipation of a rebel victory in Libya is pushing oil prices down this morning. At about $82 a barrel. And with Col. Muammar Gaddafi out of the picture the world could regain an important oil supplier, as Stephen Beard reports.
Stephen Beard: Before the conflict, Libya was supplying around 2 percent of daily global demand for crude oil. During the conflict, that supply dwindled to a trickle. European refineries in particular scrambled to find replacement oil, and that helped push crude prices higher this year. Now, traders are betting that when Gaddafi falls, what's left of Libya's oil industry will swiftly resume production.
Nick MacGregor is an oil analyst with brokers Redmayne-Bentley.
Nick MacGregor: The market probably expects around half of the previously seen export levels to be resumed relatively quickly. I think it will take longer to establish exactly how long before production can return to previous levels depending on infrastructure damage.
But, he says, the biggest downward pressure on the price of oil is coming not from the hope that Gaddafi will soon fall, but from the fear that oil demand will diminish as the European and the U.S. economies slip back into recession.
In London, I'm Stephen Beard for Marketplace.