Oil futures drop on Feb. 24 leaving behind a 28-month high
As MarketWatch reported in a piece yesterday, Crude oil traded as high as $103.41 a barrel Thursday, Feb. 24, as supply disruptions in Libya and fears of contagion among other countries in the Middle East and North Africa spooked investors. Some investors grew concerned the commodity had run up too far, too fast. Crude oil for April delivery (CLJ11 97.20, -0.08, -0.08%) ultimately declined 82 cents, or 0.8%, to settle at $97.28 a barrel on the New York Mercantile Exchange on Thursday, Feb. 24. Brent crude reached an intraday high of $119.79/bbl.
As reported in the February 24 print edition of the Wall Street Journal, Col. Moammar Gadhafi’s power in Libya appears to be slipping away. Rebels have begun the process of setting up rudimental governments in outlying areas. Concerns had been growing not only that Libya, one of Africa’s top oil producers, might spiral out of control but that neighboring countries-Tunisian, Egyptian and others-could be similarly gripped by mass unrest.
The International Energy Agency said in a Bloomberg interview that (IEA’s) member governments hold enough crude oil to provide 4 million barrels a day from inventories to the market for a year. The market is “relatively well-supplied” with stockpiles at a “comfortable” level and demand growth slowing. The International Energy Agency reported 500,000 and 750,000 barrels of oil a day have been removed from the world market due to the Libyan situation. That represents less than 1% of global consumption
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