Oil prices slip 2% after bin Laden's death

NEW YORK (CNNMoney) -- Oil prices slipped early Monday, as investors breathed a sigh of relief following news that U.S. forces had killed al-Qaeda leader Osama bin Laden.
Crude for June delivery fell $2.07, or nearly 2%, to $111.86 a barrel in early morning trading.

Prices at the pump can vary widely among states due to a number of factors. More
The declines came as Wall Street cheered the announcement that bin Laden, a mastermind of global terrorism, was killed in Abbottabad, about 31 miles north of the Pakistani capital of Islamabad.
President Barack Obama announced the death late Sunday, and officials said early Monday that bin Laden's body has been buried at sea. The news sent stock futures sharply higher in pre-market trading.
National security concerns and terrorist threats typically lead to higher commodity prices, as investors duck out of the stock market. Oil prices had risen recently as investors worried about potential supply disruptions -- with prices spiking during the past month as violence in Libya continues to escalate.
But Monday's sell-off may be short-lived.
"It's very difficult to see how this event will fundamentally change supply or demand for crude oil," said James Williams, an energy economist at the oil and gas consultancy WTRG Economics. "This seems like a gut reaction to what the West views as a happy event. A lot of times we see markets move on happy news that in reality has nothing to do with the market, and I think this is one of them."
In fact, Williams said the death of bin Laden could lead to more violence in the short-term as his followers seek retribution.
"And more violence in the Middle East probably means less oil," he said.
But if the death of bin Laden leads Obama to end the war in Afghanistan sooner, oil prices would likely trend lower.
"Any country in the Middle East, North Africa or even western Asia that goes from war to peace is definitely bearish for oil, because the more peace there is in the region, the less risk premium there is for oil," said Williams.
Meanwhile, U.S. gas prices continued to head higher. Motorist group AAA reported Monday that the national average price for a gallon of regular unleaded gasoline rose 0.9 cents to $3.952. Gas prices have jumped 11% over the past 41 days.
In other commodities, gold, which is typically seen as a safe haven during times of uncertainty, already recovered initial losses. After dipping in overnight trading on the news of bin Laden's death, gold futures for June delivery rose 70 cents to $1,557.10 an ounce. Earlier in the seesion, gold hit an intraday high of $1,577.40 an ounce.
Silver prices sold off sharply, dropping 6% after some early heavy selling. According to news reports, there had been one big sell order that triggered the drop.
The U.S. dollar managed to gain some ground against the yen but remained weak versus the euro, at $1.48. To top of page

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