Libyan rebels near victory

The Fall Gaddafi

As Tripoli falls it appears the terrible reign of Moammar Gaddafi is coming to an end. Rebel forces seem to be nearing victory, creating an interesting dynamic for the global oil market. While the winds of change are tanking the Brent crude market, the winds of hurricane Irene are supporting West Texas Intermediate. The Arab spring risk trade of being long Brent/short WTI is coming off in dramatic fashion and the record breaking Brent over WTI could start to reverse. The market seems to be optimistic that Libya could become stable soon and perhaps we could see an increase in oil production rather quickly. The Transitional National Council is already in place and it is hoped that foreign oil companies can get back in and start bringing Libyan and their high quality oil back on the market soon. From some reports it appears that most of the damage to Libya's oil facilities may not be that bad. Libyan oil production, which was roughly 1.6 million barrels of day of high quality crude before the uprising, could be 50% to 70%of normal within three months.

This will also be a boon for U.S. drivers whose prices have been kept high due in part to the high price of Brent crude. European refiners will gobble up that Libyan crude and the break in Brent crude prices should bring relief to the pump. There is more talk that the Fed will be laying the groundwork for a QE 3D! Gold is soaring as Europe is still wrapped in uncertainty! Merkal again says no to a Euro Bond!



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 pflynn@pfgbest.com.

About the Author
Phil Flynn

Senior energy analyst at The PRICE Futures Group and a Fox Business Network contributor. He is one of the world's leading market analysts, providing individual investors, professional traders, and institutions with up-to-the-minute investment and risk management insight into global petroleum, gasoline, and energy markets. His precise and timely forecasts have come to be in great demand by industry and media worldwide and his impressive career goes back almost three decades, gaining attention with his market calls and energetic personality as writer of The Energy Report. You can contact Phil by phone at (888) 264-5665 or by email at pflynn@pricegroup.com. Learn even more on our website at www.pricegroup.com.

 

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