Libya Attack Lingers Above Oil Markets
NEW YORK (TheStreet) -- Shocking attacks on the U.S. consulate in Benghazi, Libya, renewed concerns about the ubiquitous geopolitical strife that hang above crude oil markets.
President Barack Obama confirmed on Wednesday the killing of four Americans, including Ambassador Chris Stevens, in Libya, where citizens of the country have continued to rebound from a bloody civil war that saw the ouster of former dictator Muammar Qaddafi in 2011.
West Texas Intermediate (WTI) light sweet crude oil for October delivery was down 11 cents to $97.06 a barrel, as analysts suggested that investors should keep an eye on the violence in Benghazi.
"The unrest with Egypt and with Libya doesn't impact oil specifically, currently, or looking ahead, but what it does do is bring back geopolitical tension to the forefront," said Matt Smith, commodity analyst at Summit Energy Services. "That's been something that has really elevated prices this year.
Obama's statement Wednesday morning extended condolences to the families of U.S. officials killed in the attack and said justice would be done for the terrible act. The president did not disclose further details as to what type of action the United States would take in response to the events.
Smith said that politicians likely will take verbal position on the issue, but that oil prices would remain largely unaffected until policymakers layout meaningful action, if there is any.
The Benghazi attack came a day after Israeli Prime Minister Benjamin Netanyahu said that the United States and others would not reserve the right to deter Israeli action if they did not draw a "red line" concerning Iran's nuclear efforts.
"I still believe that the bigger concern here is with Netanyahu going on the newswires and saying the U.S. is being too soft in the situation developing between Iran and Israel," Smith said.
Force against Iran could potentially agitate world oil markets as the country exported some 1.1 million barrels a day in August, according to the International Energy Agency.
Heavy sanctions by the United States and European Union have cut into Iran's oil exports, which are about 650,000 barrels a day lower than at the end of last year, according to The Financial Times.
Developments in Libya, though, should not be ignored as civil war in the country proved to mire oil markets in 2011.