Oil prices fall on output negotiations as Gaddafi launches attack on rebels

OIL prices fell yesterday after the oil minister of Kuwait said that OPEC was in talks about an output increase.

The commodity has surged on unrest in the Middle East, most recently driven by Colonel Gaddafi’s brutal oppression of anti-government protests in Libya.

OPEC said it was considering an official hike in production for the first time in more than two years, allaying fears over security of supply.

In London, Brent crude fell to around $113m a barrel on the news.

Libya’s ongoing conflict has sent US crude prices to their highest level since September 2008, as investors continue to fret about potential supply disruption in the Middle East as unrest and protests spread.

Gaddafi yesterday launched an assault to recapture towns held by rebels in the country.

Reports suggest his forces have devastated Zawiyah, a refinery town just 30 miles from the capital Tripoli.

Meanwhile, Prime Minister David?Cameron spoke with US President Barak Obama to plan an end to the violence in Libya.

In a phone call yesterday afternoon, the two leader’s agreed to coordinate their efforts to end the fighting.

A Downing Street spokesperson said:?“They agreed that the common objective in Libya must be an immediate end to brutality and violence; the departure of Gaddafi from power as quickly as possible; and a transition that meets the Libyan peoples’ aspirations for freedom, dignity, and a representative government.”