Crude Oil Board

Oil Supply Hurdles Removed by Libya’s Acceptance of Truce
Kantian, Center Business Intelligence & Forecasting
Libya accepting the truce proposed by the UN heralds peace ahead and resumption of oil production in at comparatively in bigger quantity by Libya though not in full capacity. At present full capacity production cannot be resumed because of the exodus of skilled workers, temporary shutdown of exploration facilities and various related problems. However, the country will be able to increase its capacity toward the 1.6 m bbl./ day Libya could supply. The overall impact on the oil market is likely to have more supplies and consequent soothing oil prices. Today crude oil price first went up on the news on UN extending its acceptance of westerns powers taking military against Libya because this might have created so many hurdles in smooth oil supply from that country and perhaps from the region. But once Libya accepted the truce proposal to stop attacking its own citizens the oil price dropped by $3 per barrel in the international market.
Readers may recollect my forecast about fall in crude oil price by middle of March 2011 and also a hope for Libyan crisis to settle by this period in my previous article on March Oil price. Exactly this is what happened today. The oil price is likely to fall further from tomorrow toward the target below $90 as expressed in my last article.