Crude Oil Jumps above $124 on escalating Libyan Conflict

Crude oil futures contract reached its highest in last 32 months on Friday’s overnight trading session.  Investors feared long-term oil supply cut from Libya on the latest update of country’s conflict. It seems that oil fields are being targeted in result of military strikes in Libya. Experts foresee more chances of losing crude oil for long-term period due to current situation in Libya. Since the civil war Libya has reduced its oil production by 1.6 million barrels per day which happens to be 80 percent of its total oil producing capacity. Currently the country is producing 250,000 to 300,000 barrels per day of crude oil.

If we look at history, Kuwait was in similar position by oil production in the Gulf War of 1991. According to statistics it took two years for Kuwait to restore back to its normal oil production which also stood at 1.6 million barrels per day.

Traders were also uncertain as the elections were postponed in Nigeria which could result in riots and militant violence.

Nigeria happens to be 12th biggest producer of petroleum in the world and is ranked 10th among oil producing countries by its proven reserves. The OPEC member country is also the 8th largest exporter of petroleum products in the world.

The crude oil futures contract reached the intraday high of $111.68 on Friday’s overnight trading session in reaction to growing tensions in Libya and Nigeria.  London’s Brent also surged to intra-day peak of $124.45 but later settled to $124.16 reporting the gain of $1.49 for the day.

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