Oil prices came off their recent highs on Thursday after Venezuela said its proposal for a negotiated solution to the Libyan conflict was accepted by the North African government the Arab League said it was under consideration.
But a leader of the uprising against Muammar Gaddafi’s rule said he would reject any plan for talks with Gaddafi and analysts and traders remained sceptical over the prospect of any immediate end to fighting.
Industry officials have estimated the anti-Gaddafi uprising has reduced Libya’s oil production by around half as most foreign oil workers had fled.
In the key oil port of Brega, euronews correspondent Francesca Cicardi said attacks continue: “This morning (Thursday) Gaddafi’s people bombed around the oil terminal, but not the installations themselves as that could cause major explosions which would be very dangerous. That’s why it is safe in this area. We’re told that the terminal is not operating at the moment.”
Analysts said they were worried about damage to Libya’s oil infrastructure as a result of the fighting and they remain focused on the possibility of the unrest spreading to places like Algeria or even Saudi Arabia.