Violence that is tearing apart Northern African nation of Libya has devastating humanitarian implications – and causing oil prices to soar . BP Chief Executive Bob Dudley is watching this very closely, as petroleum futures surged to record levels in mid-2008. Oil market could easily jump another $10 in the short term if violence continues, said David Cohen, director of Asian Economic Forecasting at Asian Economics
Libya is 1st OPEC member state to be struck by wave of populist uprisings that has spread through Mideast. It is also 1 of biggest petro-exporters, w/ single largest oil reserves in all of Africa. W/ much of country in turmoil, and militias opening fire on anyone moving in capital of Tripoli, experts predict could be disruptions in production and delays in oil shipments Disruptions and delays quickly being factored in as everyone from oil producers down to local service stations start setting prices
Already up about 20% across most of US when compared with what gallon of regular unleaded went for year ago. AAA reports the average pump price is $3.17 gallon, though some markets are already nudging $3.50. Oil Price Information Service predicts the national average could be $3.75 by Memorial Day. Industry officials, including former Shell Oil chairman, have forecast that $4 and even $5 gallon could be coming — even w/out push of political revolt in Mideast. Oil is being bought on risk contagion will spread through Middle East, said Jonathan Barratt, managing director of Commodity Broking Services, in Sydney.
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