LONDON – Brent oil prices soared above $105 per barrel on Monday, striking a fresh two-year peak as deadly violence in Libya fuelled concerns over spreading unrest in the Middle East and north Africa region.
Brent North Sea crude for delivery in April surged to $105.15 per barrel, the highest level since late September 2008, before pulling back slightly to $105.02, up $2.50 from Friday’s closing level.
New York’s main contract, light sweet crude for March, known as West Texas Intermediate, jumped to $90.52. It later stood at $90.35, up by a hefty $4.15 from Friday.
Angry Libyan protesters ransacked the state broadcaster and set government buildings ablaze on Monday, as the son of leader Moamer Kadhafi warned the country faces civil war and “rivers of blood”.
With gunfire crackling in the streets of Tripoli, and Human Rights Watch putting the death toll at 233 since Thursday, Saif al-Islam Kadhafi vaguely promised reforms as he condemned the revolt as a foreign plot.
Moamer Kadhafi, 68, the longest-serving leader in the Arab world, remained out of sight.
“Brent crude oil hit a new high above $105 a barrel, following news of the strike at a Libyan oil field today, and the fear of oil field disruption looms large,” said analyst Rebecca Seabury at UK energy consultancy Inenco.
OPEC member Libya is Africa’s fourth largest oil producer after Nigeria, Algeria and Angola, boasting production of 1.8 million barrels per day and estimated reserves of 42 billion barrels.
Libya exports most of its oil to European countries, including Italy, Germany, Spain and France.
“Violence in Libya is the main driver of the price rise,” added Commerzbank analyst Carsten Fritsch.
“An influential tribal leader has threatened to cease oil shipments to the West within 24 hours if the violence against protesters does not end.”
The market had breached $104 last week on escalating tensions in the key oil-supplying Middle East and North Africa area, following the ousting of presidents in Egypt and Tunisia.
Elsewhere on Monday, Bahrain’s Sunni Muslim ruling family came under increased pressure to open in-depth negotiations with the Shiite-led opposition as protesters erected more tents on the capital’s Pearl Square.
Experts warned that oil prices could rocket to record levels beyond $147 per barrel — if the unrest spreads to Saudi Arabia
“The market will be most concerned over the protests spilling into Saudi Arabia. So far we have only seen low key, small scale protests there,” added Seabury.
“However, as Saudi Arabia is the world’s largest oil exporter, if the situation escalates this could take oil prices … higher than the $147 a barrel we saw in 2008.”
On Tuesday, the International Energy Forum will meet in Saudi Arabia as the geopolitical tensions and economic recovery drive prices back to levels last seen before the 2008 global financial crisis. The IEF groups the world’s top oil producing and consuming nations.
Raw Story is a progressive news site that focuses on stories often ignored in the mainstream media. While giving coverage to the big stories of the day, we also bring our readers' attention to policy, politics, legal and human rights stories that get ignored in an infotainment culture driven solely by pageviews.
Founded in 2004, Raw Story reaches 5 million unique readers per month and serves more than 19 million pageviews.