Oil shoots higher on Libya turmoil

By Agence France-Presse
Monday, March 7, 2011 16:48 EDT
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NEW YORK – Crude oil prices surged again Monday as traders fretted about escalating clashes in Libya between forces loyal to leader Moamer Kadhafi and rebels seeking to end his four-decade rule.

New York’s main contract, light sweet crude for delivery in April, settled at $105.44 a barrel, a gain of $1.02 since Friday.

The benchmark WTI futures contract had already gained more than 20 percent in the past two weeks. Earlier Monday, it reached an intraday peak of $106.95, the highest mark since September 26, 2008.

In London, Brent North Sea crude for April climbed as high as $118.50 before easing back to close at $115.04 a barrel.

“As long as these battles between Kadhafi and the rebels continue, we are going to see crude bid up,” said Matt Smith at Summit Energy.

“Especially as during the weekend we saw further problems in other countries, such as Bahrain and Yemen.”

Kadhafi forces launched new air strikes on rebels near the key oil port of Ras Lanuf as the three-week-old conflict veered toward civil war.

“With all the uncertainty about how much production is getting off line in Libya, we are still going to see the market nervous and with a bullish impetus,” Smith said.

Libya is the fourth-biggest oil exporter in Africa after Nigeria, Algeria and Angola, producing around 1.8 million barrels a day, with reserves of 42 billion barrels.

Mike Fitzpatrick of Kilduff Report explained the port town has about 200,000 barrels of crude in its terminal and is home to the country’s biggest refinery, with daily output capacity of 220,000 barrels.

Last week, the International Energy Agency estimated that the turmoil has cost Libya between 850,000 and one million barrels of production a day, more than half of its output and about 1.0 percent of global consumption.

Agence France-Presse
Agence France-Presse
AFP journalists cover wars, conflicts, politics, science, health, the environment, technology, fashion, entertainment, the offbeat, sports and a whole lot more in text, photographs, video, graphics and online.
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