Oil Climbs as Supply Fears Persist
World oil prices rose further on Friday as supply worries persisted due to escalating unrest in the oil-rich Middle East and North Africa, traders said.
Brent North Sea crude for delivery in April rose 76 cents to $112.12 per barrel, having rocketed the previous day to $119.79 -- the highest level since August 22, 2008 -- before sliding lower as many traders took profits.
Elsewhere on Friday, New York's light sweet crude for April, known as West Texas Intermediate (WTI), also gained 76 cents to $97.47 a barrel. On Thursday it briefly struck $103.41, a level last seen in late September 2008.
London oil prices hit a 30-month high on Thursday, before falling back as traders fretted over the possibility of supply problems amid more unrest in oil producer Libya.
"Behind this volatility is the great uncertainty on the scale of supply outages in Libya and as to which country can compensate for these losses," said Commerzbank analyst Carsten Fritsch
"Saudi Arabia has declared its willingness to compensate for the supply losses from Libya.
"However, many refineries in Europe that obtain their oil from Libya can only process light oil. It is questionable whether Saudi-Arabia can deliver this oil."
Concerns of a complete cutoff of Libya's 1.6 million barrels a day of light crude drove prices upwards this week, as Libya's leader Moamer Kadhafi appeared isolated in the capital Tripoli and the country appeared deeply split and some areas plunged into lawlessness.
"At this rate it will not be long before prices revisit the highs above $140 seen in 2008," analysts at research house Capital Economics said in a market commentary.
"Given the pace at which markets are moving and events are unfolding in the Middle East and North Africa, we are of course extremely wary of making any strong calls on what happens next."
The OPEC oil cartel has promised to boost output to make up for any production loss in revolt-hit Libya.
Saudi Oil Minister Ali al-Naimi said Tuesday that the cartel was prepared to meet any supply shortage caused by unrest in the Middle East and its members had sufficient spare capacity to do so.
The OPEC kingpin also on Thursday reassured oil consumers that the nation would boost production to make up for any production lost in Libya, according to oil specialist Platts.
World leaders on Friday were studying possible punitive measures against Moamer Kadhafi as the Libyan strongman's crackdown on a nationwide revolt grew more desperate.
Diplomats said they were studying a possible no-fly zone over Libya, as well as a travel ban and assets freeze against the Kadhafi family, amid mounting concern over the growing death toll.
Investors were also monitoring the situation in Bahrain, where thousands of protesters were staging a march in Manama and pressing an 11-day uprising against the monarchy, said Ong Yi Ling, investment analyst for Phillip Futures in Singapore.
"While Bahrain is not a major oil producer, it has close ties to Saudi Arabia, so it is important to the strategic balance of power in the Middle East," said Ong.
Source: Agence France Presse
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