Brent oil sank today on the prospects of a recovery in Libyan crude output as a rebel advance deep into Tripoli left leader Moamer Gaddafi facing the end-game after six months of violent unrest.
Brent North Sea crude for October delivery plunged as low as $105.15 a barrel. But it later trimmed losses to stand at $107.01, down $1.51 from Friday's closing level.
New York's main contract, light sweet crude for September delivery, added ten cents to $82.36 a barrel, with its direction more linked to the health of US supplies.
Analysts said that even though it is unlikely that Libya will return to pre-uprising output levels before the end of the year, today's events mark substantial progress after months of stalemate.
Fighting raged today near the compound of Gaddafi and in other parts of Tripoli, witnesses said, a day after jubilant rebels overran the symbolic heart of the capital.
Libya, a key African oil exporter, produced about 1.6 million barrels a day before the rebellion broke out in mid-February but has since seen its output slow to a trickle since the revolt.
The supply shortfall had pushed up Brent prices, while New York oil prices are more linked to the US market and abundant supplies in the country's midwest. The differential between Brent and New York oil prices had struck a record $26 late last week.
Around 85% of Libyan oil output was exported to Europe until the revolt disrupted the country's production. Brent crude from the North Sea would be particularly affected by the likelihood of Libya gradually resuming supplies to the European market, analysts said.
Meanwhile, the price of gold struck another all-time peak of $1,894.80 on the London Bullion Market today, beating its high of $1,878.15 recorded last Friday.
World Bank ready to help Libya
The World Bank said today it has been monitoring Libya's economic situation and would be guided by member countries on resuming its activities with the country.
'Guided by our shareholders, the Bank will reengage with Libya just as soon as we can be helpful in the country's recovery,' the 187-nation development lender said in a statement.
'For the duration of the conflict to the extent possible we have monitored Libya's economic situation in coordination with the UN but we have had no staff in Tripoli since earlier on in the year,' it said.
