The oil market is well-supplied and refineries are adjusting to a halt in light, sweet crude from Libya, according to Mark Williams, Royal Dutch Shell Plc's downstream director.

"The market remains well-supplied, there is plenty of coverage in supply capacity," he said today in an interview in Paris. "The world refinery system is more than adequate to cope with the crude diet. There is no trouble in our system."

Shell is "not actively marketing" refineries, Williams said. The company may be affected by a halt last quarter of its Pernis refinery in the Netherlands, Europe's largest, he said.

"Pernis was down for part of the quarter," he said. "It will have some impact on our results."

Eoin Treacy's view The view of oil companies remains that they can deal with the loss of Libyan supply at least for the moment. However, the fact remains that the global supply situation, particularly for light sweet crude oil is now tighter.

Brent crude rallied to a peak of $120 in mid February. At the time, a large number of bullish forecasts were released which together with the short-term overbought condition helped to signal that a near-term peak had been reached. However, Brent held most of its advance. The progression of higher reaction lows, currently near $110, remains intact and it broke above $120 on Monday. A clear downward dynamic would now be required to check potential for some additional upside.

High oil prices act as a tax on consumption. Above $100 crude oil starts to become an ever increasing economic headwind. In 2008 the burdens of oil prices spiking to $147, comparatively high interest rates and the subprime crisis conspired to prompt a recession. At present, the financial system is on a much reduced but firmer footing, interest rates remain close to historic lows but oil prices are still rising.

Stock markets have yet to signal increased anxiety at high energy prices. This may be a delayed reaction. The additional stimulus entering the global economy due to the concerted efforts to weaken the Yen may be part of the reason for this. Some of the better performing stock markets, particularly in Asia and commodity producing Latin America, have firm currencies which are at least partially cushioning the effects of higher commodity prices.

Brent Crude has surmounted the 2008 peak when quoted in the Polish Zloty, Argentine Peso and Russian Ruble. It is currently retesting its 2008 highs when denominated in Euro, South African Rand, British Pounds, Chinese Renminbi and the Mexican Peso.

The relative strength of the Singapore Dollar, Taiwan Dollar, Thai Baht, Indonesian Rupiah, Brazilian Real, Swiss Franc, Canadian Dollar, Australian Dollar, Chilean Peso among others have not offset the advance in oil prices but it has moderated it somewhat. This should be to their advantage in a period when commodity price inflation remains likely to attract investor ire.