Oil prices have fallen sharply after news came out that rebel forces were close to victory in Tripoli, the capital of Libya. The rebels reached the city yesterday and have reportedly taken control of four fifths of the capital.

The markets reacted positively to the news and Brent Crude futures fell by 1.8% to US$ 106.7 per barrel, whilst US sweet, light crude remained steady at US$ 82.9.

Before the uprising began, Libyan refineries were supplying 1.6 million bpd of oil or 2% of the global oil supply, but this has been almost completely curtailed as the conflict has raged on for the lat three months. Global concerns over the American debt and fears of a double dip recession have also weighed heavily upon Asian markets, contributing to the fall.

As the conflict reaches its conclusion it is hoped that the prices will fall further, even though it is unlikely that production will reach pre-conflict levels immediately as it is not known how much damage the countries oil-producing infrastructure and oil refineries have been dealt in the conflict.