Oil price surge dips after talks

Oil prices have retreated from Thursday’s multi-year highs amid optimism that crude producers can offset any drop in supply caused by the unrest in Libya.

Brent crude was trading at $112.65 a barrel, after almost breaking through the $120 mark on Thursday.

US light crude was at $97.49 a barrel. It surged past $100 on Thursday.

Asian stock indexes gained with analysts saying they were now more optimistic about global growth.

Singapore’s STI stock index and Hong Kong’s Hang Seng saw increases of more than 1%.

Stock markets in South Korea, Japan and Taiwan also gained.

‘Verbal finesse’

Analysts said that the mood had been helped by comments from Saudi Arabia and the International Energy Agency (IEA).

Saudi Arabia said that it would step in to fill any shortfall in supply should it be needed now or should the Libyan situation deteriorate in future.

At the same time, the IEA said that Libyan production had been less affected than many observers had first forecast.

Analysts said that the markets want to see crude supplies becoming available as and when they are needed.

The worry is that if oil prices climb too high, then they will slow global economic growth, and hurt consumers and companies.

“Now is not the time for producers to attempt verbal finesse,” said analysts at Barclays Capital in a research note.

“It is better to visibly supply more oil now, and then pull it off the market swiftly if it later proves unnecessary.”
Source: BBC