Oil price steadies at prospect of Libya deals

The price of Brent crude edged up to just over $110 a barrel as attention turned to prospects for Libya’s oil following news of Colonel Gaddafi’s disappearance after rebels overran his compound in the capital Tripoli.

World powers were said to be planning next moves for relations with Libya, potentially paving the way for oil firms to strike deals with the new leadership.

Libya’s reconstruction representative on the country’s Transitional National Council is understood to have said he expects pre-conflict oil production levels to be restored within a year.

French officials announced that Paris was already working with allies to draw up a UN resolution that would unfreeze Libyan assets previously blocked by UN Security Council resolutions.

In Doha, representatives of the UK, France, Turkey, Italy, Qatar and the US were meeting to raise $2.5 billion to provide aid to Libya and support the NTC’s reconstruction efforts.

In Italy, there were reports that Italian oil major ENI was lobbying rebel leaders to hold its position as Libya’s top energy producer after the end of Gaddafi’s 42-year regime.

ENI is thought to have been in touch with rebels during the conflict to ensure it holds its ground against French, UK and US companies trying to cash in on their countries’ military help for the rebels through Nato.

Giles Watts, head of equities at City Index in London, said news that Libya now appeared to be moving towards a post-Gaddafi solution had reassured markets.

There was also a chance that longer-term concerns about the world economy would affect oil prices more than short-term considerations about Libya.

He said, however, that investors were far from convinced that the Libyan situation was secure.

“It’s a very uncertain time going forward. There is still nervousness that any major shifts could have a significant impact,” he said.