Oil prices fall following Libya progress

Prices in the oil industry have dropped as markets anticipate an end to the civil war in Libya.

As rebels entered Tripoli this weekend, oil prices fell sharply as expectations increased that oil exports from Libya will resume once again.

Benchmark Brent crude dropped more than $3 (£1.80) to trade below $106 a barrel in early trading in London, while US crude was down almost a dollar at $81.30, a one per cent drop.

Prior to the civil unrest, Libya supplied around two per cent of the world's oil, some 1.6 million barrels a day, with analysts expecting the country to start pumping up to one million barrels a day within a few months.

"The big question is how much damage has been done to the oil facilities in Libya where the fighting has gone on much longer than in Iraq. There's a risk it may take a bit longer in Libya," Carsten Fritsch, an analyst at Commerzbank in Frankfurt, told Reuters.