Oil sank from 2-1/2-year highs near $120 a barrel Thursday in a late-day rout, dragged down by an unsubstantiated rumor Muammar Gaddafi had been shot and Saudi Arabia’s assurances it can counter Libyan supply disruptions.
A U.S. official said Washington had no reason to believe the Libyan leader was dead after the rumor swept through oil markets and sent prices tumbling more than $2 a barrel just before settlement.
Prices surged in early activity on news the Libyan revolt had caused large disruptions in the OPEC nation’s oil supplies — potentially up to three-quarters of output — though the scale of the loss could not be confirmed.
Markets had earlier eased on news top OPEC exporter Saudi Arabia was in talks with European refiners affected by the disruption.
Read full story here