Commodity Corner: Oil Falls on Libyan Rebels' Apparent Progress

Crude oil for May delivery fell $1.42 Monday as news reports indicate that Libyan rebel forces made important advances over the weekend.

Oil settled at $103.98 Monday after the rebels—aided with NATO member countries' airpower—reportedly made great strides in a westward campaign. The rebels recaptured important oil facilities and even made inroads toward overtaking Muammar Gadhafi's stronghold and hometown of Sirte.

The progress even led a rebel spokesman to tell the Agence France-Presse news agency that Libyan oil exports could begin again within a week, according to a Dow Jones Newswires article. Should exports resume, it is unlikely that Libya would return to its pre-civil war oil production rate of 1.3 million barrels per day anytime soon. Without NATO's enforcement of a no-fly zone, rebel forces would face a much more daunting challenge against Gadhafi's well-armed loyalists.

Oil futures fluctuated from $103.60 to $105.76 Monday.

Although the Upper Midwest and Northeast regions of the U.S. continue to cope with unseasonably cold temperatures, April natural gas lost three cents Monday to settle at $4.37 per thousand cubic feet. Natural gas hit a seven-week high Monday, but with the pre-summer "shoulder season" for gas underway traders were pessimistic that prices would get much higher than they have recently.

Front-month natural gas traded within a range from $4.37 to $4.475 Monday.

April gasoline ended the day at $3.03 a gallon, down a penny from the previous session. Gasoline peaked at $3.06 and bottomed out at $3.01 during Monday's trading.

Matthew V. Veazey has written about the oil and gas industry since 2000. Email Matthew at mveazey@rigzone.com

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Brent Crude Oil : $52.72/BBL 3.31%
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