Petrobras (PBR) CFO Almir Barbassa said oil prices could fall to as low as $70 a barrel when the unrest in Libya that has disrupted production blows over and stability is restored in the Middle East and North Africa. The comments come just a couple of days after NYMEX-traded crude briefly traded above $100 a barrel for the first time since 2008.
''I don?t see the case that is happening in North Africa as an extended situation,'' Barbassa said in an interview with MarketWatch. Barbassa said when tensions in the Middle East and North Africa are resolved, oil could fall to between $70 and $90 per barrel. Oil last traded in the $70 area in September.
Last week, oil prices surged 14%, the commodity's biggest weekly jump since January 2009, as the situation in Libya escalated. Libya, an OPEC member, is Africa's third-largest oil producer behind Angola and Nigeria and home to the continent's largest oil reserves.
Libya produces about 1.6 million barrels of oil per day, most of which is exported to Europe, but heightened violence in the country has almost certainly reduced that number. Barclays said 1 million barrels a day in Libyan supply is being lost while Goldman Sachs said 500,000 barrels per day may have been wiped out.