The price of oil has fallen back Friday amid optimism that producers will be able to offset any drop in supply caused by unrest in Libya. Brent crude oil drop in below $113 a barrel after having peaked at almost $120 on Thursday, while US light crude oil fell back below $100.
Oil is still flowing from Libya, but a ripple in the Middle Eastern oil supply creates waves all over the world. According to market experts, political convulsions in Iran, Kuwait and Iraq that have caused oil prices to gyrate since the 1970s.
Libyan oil is light and sweet and is the kind that refineries want for making low-sulfur diesel, which is widely desired in Europe, and jet fuel, of which the U.S. makes a lot. Both markets require low-sulfur fuel because it pollutes less.
Countries such as Saudi Arabia produce heavy and sour oil, the type containing high amounts of sulfur, which makes old refinery production useless. However, many new refineries located in the US have the ability to take out the sulfur in large quantities making the oil usable, according to the National Petrochemical and Refiners Association.
Unfortunately, many still worry that with increasing demands from China, and India factored into oil and transportation disruption all across the Middle East may boost oil prices even further, yet this may be tempered with about 700 million barrels of oil in the U.S. Strategic Petroleum Reserve. Many are still unsure as to the future of oil prices.
(아주경제 앤드류 이 기자)
reporter
Park Sae-jin
swatchsjp@ajunews.com