Oil on boil: Blame Libya, not Japan quake, says FACTS

Crude prices have been on a rise since the past many months now and the unending unrest in the Middle-East is pushing it further up. Brent climbed 1.5% on Monday towards USD 116 per barrel after western forces launched a military campaign against Libya, stoking fears of intensifying violence in North Africa and the Middle-East.

The prices would cool down only once tension in the Middle East and North Africa (MENA) region subsides, said Praveen Kumar senior consultant and head of South Asia oil & gas team at FACTS Global Energy. "Until then, it may remain buoyant," he added. Worries in Japan are not going to impact global crude oil prices; it would impact product market in stead, he said. "What is a matter of concern as of now is the ongoing conflict in Libya and other neighboring nations," Kumar added. Brent crude for May rose as much as USD 2.29 to USD 116.22 a barrel and was up 1.5% at USD 115.69 by 0343 GMT, about USD 4 from last month's two-and-a-half-year high near USD 120 per barrel. Kumar estimates Brent crude prices to be around USD 115 per barrel in the long-term. "However, for the year we see it around USD 102-103 per barrel," he added. The Organization of the Petroleum Exporting Countries (OPEC), he said, will be comfortable with prices at USD 80 per barrel. However, he believes that global crude production won't be impacted significantly. "While oil production in Libya has dropped to less than a million barrels a day from 1.6 million, Saudi Arabia has already started ramping up its production. It has upped it oil output to 9.2 million barrels a day from 8 million earlier. So Saudi can cover up for the decline in production in Libya," Kumar explained. Where does FACTS Global see crude headed in long-term?