The European benchmark price for oil fell and shares of European oil companies rose Monday as speculation grew that the fighting in oil producer Libya was close to ending.
October Brent crude was was down by as much as $3.29 a barrel earlier, but by late afternoon was only lower by 47 cents at $108.15 US a barrel US in New York.
Investors hoped the ouster of Libyan leader Moammar Gadhafi could allow the nation to resume oil exports, which have stopped during the country's six-month conflict.
Libya — a major supplier of oil consumed in Europe — produced 1.6 million barrels a day, or nearly two per cent of world output, before the fighting escalated in February. Brent peaked in April at $127.
Rebels entered the capital city of Tripoli Sunday and declared that Gadhafi's rule had ended.
That could ease global supply constraints that drove fuel prices to three-year highs earlier this year.
But experts say it's unlikely that Libya will get its oil production running soon because of damage to oil fields and pipelines.
Suncor monitoring Libyan situation
Light sweet crude, the North American benchmark, went in the other direction, gaining $1.86 cents, or 2.3 per cent, to $84.21 US.
Eni, the Italian oil company that had been the biggest foreign producer operating in Libya before the fighting, saw its stock rise. It shares trading in New York rose 26 cents to 19.28.
Oilfield services firm Petrofac Ltd., which expects to win contracts rebuilding oil infrastructure in Libya, closed in London with a gain of 3.7 per cent
Shares in Calgary-based Suncor, which has assets in Libya, closed down 39 cents. or 1.33 per cent, to $28.83.
Suncor spokeswoman Kelli Stevens said it's still too early to know what the effects will be.
"We are continuing to monitor how that situation unfolds," she said. "The most important piece for us, right now, is probably that this latest set of developments might mean peace is nearer for the Libyan people."
Suncor took a $514-million write-down on its Libyan assets during the second-quarter. Those assets contributed only nine per cent to Suncor's output before the fighting forced the firm to shut-in production.
Suncor's operations in another conflict-ridden country, Syria, have continued throughout a bloody crackdown on anti-government protests. The company acquired assets in both countries through its 2009 merger with Petro-Canada.