Brasília – Turmoil in Libya has caused fear in financial markets, resulting in appreciation of the barrel of oil. On Thursday (24) the price of oil reached its peak for the last two and a half years, due to political instability in that country. The price of the Brent barrel peaked at US$ 119.79 on Thursday morning in London, before sliding back to US$ 114.65.
According to the International Energy Agency, Libya produces 1.6 million barrels of oil a day, and is responsible for 2% of the oil extracted worldwide. In the European market, though, Libya is responsible for 10% of supply. Italy is the main buyer. Oil activity is fundamental for the Libyan economy, representing 95% of exports and 25% of Gross Domestic Product (GDP).
In the United States, the price of the barrel of oil reached US$ 103.41, but dropped along the day, to close to US$ 100. The last time oil peaked so much was in August 2008.
According to BNP Paribas bank, the price of oil should reach an average price of US$ 117 in the second quarter of 2011. Several oil companies suspended production of oil in Libya during the week, among them the French Total, the Spanish Repsol, the Austrian OMV and the Italian ENI. Wintershall, from Germany, also announced its halting of activities in the country.
*Translated by Mark Ament
