BofA Says Libya Oil Output Could Completely Shutdown

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Libya, Africa's third-largest oil producer, could see its oil output shuttered and remain closed for an extended time frame, according to Bank of America Merrill Lynch. Libya, home to Africa's largest oil reserves, produces about 1.6 million barrels per day.

Output in the country has declined as political protests calling for the ouster of embattled dictator Moammar Qaddafi have escalated in recent days. Barclays estimates 1 million barrels per day in Libyan production has been lost. Goldman Sachs put its estimate at 500,000 barrels a day.

''We expect Libyan production to be shut down completely and we might lose sweet crudes from Libya for a prolonged period of time,'' Bank of America Merrill Lynch told Reuters. The bank is currently discussing scenarios and outlooks, and will publish a report on its findings in the coming days, Reuters reported.

Industry experts and political analysts are fearful Libya's problems could spread to nearby Algeria, also an OPEC member, which pumps about 1.2 million barrels of crude per day. NYMEX-traded crude for April delivery closed at $97.28 today after pulling back from a 29-month high of $103.41.