Libya rocks the global marketplace. Turmoil and the reaction of Libyan leader Moammar Gadhafi could strike a major blow against the global economic recovery. We have shifted from buying all things commodities to now worrying about how high oil prices might impact the demand for the same.
We can rattle off the statistics about Libya's oil production and how they pumped about 1.6 million barrel a day in January, or roughly 1.7% of the world production. We can talk about losing the 1.17 million barrels a day of exports, but that would only be a small part of the overall story.
We are seeing a historic uprising that is spreading throughout the region. OPEC has the spare capacity to make up for Libya, but what if the uprising spreads to other countries? It makes one wonder if this continues to spread, whether or not there is going to be an OPEC.
In the short run, oil is worrying about civil war. A report that Libyan helicopters massacred their own people was enough to get the market running even higher. Oil traders fear that a civil war would perhaps take Libyan oil out of play for years to come. In a speech Gadhafi's son has used that very treat. As you can imagine it's a wildly busy day.
Phil Flynn is senior energy analyst for PFGBest Research and a Fox Business Network contributor. He can be reached at (800) 935-6487 or at firstname.lastname@example.org.