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Libyan oil fire slows production

News of the fire sent futures prices for oil higher.

By Ed Adamczyk

AL-SIDRA , Libya, Dec. 26 (UPI) -- An oil storage fire in the port city of al-Sidra, Libya, caused by Islamist attacks, spread Friday to two more tanks and reduced Libya's crude oil production.

The price of oil moved upward on news of the fighting and the fire. Brent crude oil futures rose to over $60 per barrel on the London-based ICE Futures Europe exchange.

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"The situation is getting worse in Libya and we can pretty much write off supplies from there. Even without an OPEC supply cut, we are getting one from Libya," Olivier Jakob of the Swiss energy analysis firm Petromatix told Bloomberg News.

The militants of Fajr Libya, or Libya Dawn, attacked the port by speedboat Thursday, setting an oil tank ablaze and killing 19 soldiers in an attempt to seize the main oil terminal, security officials said. The militants and the recognized Libyan government in Tripoli each blamed the other for starting the fire.

"The clashes have hit several tanks, which are burning," said Mohamed El Harari, National Oil Corp. spokesman. He added the attack reduced output by 352,000 barrels per day.

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Daily production of Libyan crude oil was 1.6 million barrels in 2011.

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