Oil spikes over Libya worries

The price of Brent crude oil is above the $110 mark after the Libyan prime minister was captured and then released after a few hours.

Brent crude oil is up nearly 2% as traders fear that political uncertainty in Libya could lead to supply issues. Prime minister Ali Zeidan was captured and held for several hours by militants before being freed.

Libya produces 700,000 barrels of oil per day, but output slumped during the civil war in 2011, and traders are worried today’s kidnapping could lead to further political uncertainty in the country.

North Africa and the Middle East are big oil producing regions and conflict often sees the price edge higher as traders tend to fear the worst.

Oil is also benefiting from the Janet Yellen effect, after US president Barack Obama nominated Ms Yellen for the top job at the Federal Reserve. Ms Yellen, who should being her new role early next year, is known for her dovish views, so she is likely to keep the US stimulus package in place which should boost the price of oil.

Daily Brent Crude (Dec) (10 Oct 13) chart

Denna information har sammanställts av IG, ett handelsnamn för IG Markets Limited. Utöver friskrivningen nedan innehåller materialet på denna sida inte ett fastställande av våra handelspriser, eller ett erbjudande om en transaktion i ett finansiellt instrument. IG accepterar inget ansvar för eventuella åtgärder som görs eller inte görs baserat på detta material eller för de följder detta kan få. Inga garantier ges för riktigheten eller fullständigheten av denna information. Någon person som agerar på informationen gör det således på egen risk. Materialet tar inte hänsyn till specifika placeringsmål, ekonomiska situationer och behov av någon specifik person som får ta del av detta. Det har inte upprättats i enlighet med rättsliga krav som ställs för att främja oberoende investeringsanalyser utan skall betraktas som marknadsföringsmaterial.