Libya Planes Fire Missiles On Oil Facility Port Town Of Brega

Update:Fresh Libyan air strike in Brega, bomb explodes next to oil engineering university about 2KM from oil terminal - witness

WTI spikes by $0.70 following reports that a Libya plane has fired two missiles on the town of Brega, which contains a critical oil facility. The fact that Libya is now apparently willing to gamble with its oil infrastructure is precisely the worst case scenario that many have predicted. Stocks, of course, jump on the news too.

A reminder of Brega's signficance:

Port Brega lies at the edge of the area controlled by opposition fighters along the 600-mile coastal highway between Benghazi and Tripoli. The oil and gas complex feeds natural-gas pipelines that supply the energy needs of major eastern cities as well as Tripoli, according to workers at the complex.

If Kadafi's soldiers are in control of the refinery, they could conceivably cut off gas supplies to the east and also deny opposition-controlled areas the gasoline, diesel and heating fuel produced at the Sirte Oil refinery.

The facility has continued to pump crude oil from major oil fields in the southern desert, sending it to Europe through a terminal at Port Brega. Western governments have frozen Libya's oil proceeds.

On Monday, both the city of Port Brega and the oil facility were lightly guarded, with only four men armed among the 15 to 20 young rebels lounging at the rebels' westernmost highway checkpoint, near the oil company's main gate.

More as we see it.