US Cannot Confirm Rumors Gaddafi Shot; Oil Tumbles

by Guest Fri 25 Feb 2011, 06:25

US Cannot Confirm Rumors Gaddafi Shot; Oil Tumbles
Published: Thursday, 24 Feb 2011 | 3:54 PM ET Text Size By: CNBC.com with Reuters

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Gold slipped and crude prices retreated sharply from 2 1/2 year highs on speculation Libyan leader Muammar Gaddafi had been shot but other markets did not immediately react to the unsubstantiated rumors.

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Libyan leader Muammar Gaddafi
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A senior official told NBC News that the U.S. government cannot confirm rumors circulating online that Gaddafi is dead, after traders cited the as reason for falling oil prices.

Crude prices plummeted near the end of the session, with U.S. light crude futures settling down 85 cents at $97.25. Crude futures were down more than $2 in post-settlement trade.

Brent futures in London also turned negative after posting gains that had pushed the North Sea contract up more than 7 percent to nearly $120 a barrel.

Traders also cited earlier reports that Saudi Arabia was in talks with European refiners to make up for the loss of Libyan crude and rumors of a possible release of U.S. emergency oil stockpiles as weighing on the futures market for crude.

The White House said it has the capacity to act in the event of a major disruption of oil supplies caused by the unrest. It is discussing the situation with the International Energy Agency and oil-producing nations.

The IEA again urged the Organization of Petroleum Exporting Countries to draw on excess production capacity if required, adding that both consumers and producers had the tools to deliver enough oil to the market.

Without mentioning Libya, the IEA estimates that between 500,000 and 750,000 barrels per day of crude oil, or less than 1 percent of global daily consumption, have been removed "at present" from the market.

Spot gold prices were last more than $4 lower.

Equity, government debt and currency markets barely reacted to the sharp downturn in crude oil prices.

The Dow Jones industrial average [.DJIA 12068.50 -37.28 (-0.31%) ] was down about 18 points late in the regular Thursday session. The Standard & Poor's 500 Index [.SPX 1306.10 -1.30 (-0.1%) ] was slightly lower, while the Nasdaq Composite Index [.NCOMP 2737.90 14.91 (+0.55%) ] was up slightly.

Earlier in the session the safe-haven Swiss franc hit a record high as the uprising in Libya rattled investors on concerns political unrest could spread to Saudi Arabia and other oil-producing countries in the Gulf.