Stock Markets Plunge As Crude Prices Soar

The turmoil in Libya caused the stocks to take a nose dive for the fourth successive session in the European markets.

Crude oil prices soaring all over The crude oil prices soared as major oil companies announced that they are going to suspend their operations in the strife torn country, as violence has escalated during the ongoing demonstrations.

The total impact of the turmoil in Libya on its oil production is not clear but according to an estimate by the Barclays Capital, nearly 1 million barrels of production per day has been hit.

West Texas Intermediate crude for April delivery soared by $2.68 per barrel or a 2.8 percent increase to settle at $98.10 on the New York Mercantile Exchange but not before briefly hitting $100 per barrel. This is the highest after October, 2008.

Brent crude also soared by $5.83 or 5.5 percent by reaching $111.61 per barrel on the ICE futures exchange. It had crossed the $100 mark in January itself.

Major companies discontinue operations in Libya Almost all the major oil companies have announced the suspension of operations in Libya as the demonstrations are becoming increasingly more violent and the situation is taking a turn for the worse in the oil rich country.

Germanys Wintershall, which produced nearly 100,000 barrels per day, has announced that it has stopped its operations in Libya.

Spains Repsol YPF said it is also suspending operations. It produced more than 200,000 barrels per day in its Sharara oil fields.

Other companies including Frances Total, Norways Statoil and Italys Eni have also confirmed that they have suspended operations in Libya.

Incidentally, Libya is the first country in the region where oil supply has been hit by the mass demonstrations.

So far this turmoil has forced the rulers of Tunisia and Egypt who had been capturing power for last many decades, to abdicate power.

Libya is an important supplier of oil, especially for some countries in the Europe. It is the eighth largest oil producer among the Organization of Petroleum Exporting Countries (OPEC).

The total impact of the turmoil in Libya on its oil production is not clear but according to an estimate by the Barclays Capital, nearly 1 million barrels of production per day has been hit by the recent turmoil.

Share markets feel the heat The rising prices of crude oil pushed down the stock markets all over. The Stoxx Europe 600 index was down by 1.1 percent.

Shares belonging to the travel and leisure industry were hit the hardest. Increased prices of fuel and decreased prospects of traveling to Middle Eastern countries made these fall by 2.3 percent at the Stoxx Europe.

Other countries also had their markets tumbling down with UK's FTSE 100 falling by 1.2 percent, Germanys DAX, by 1.7 percent and Frances CAC-40 falling by 0.9 percent.