New York: Oil rose as allied air strikes in Libya threatened to prolong a supply disruption in Africa's third-biggest producer and on concern that escalating turmoil may curtail Middle East shipments.
Futures climbed as much as 2.3 per cent after Muammar Gaddafi vowed to repel attacks against military installations
"Prices are going to go up when there are explosions in a major oil-producing country," said Michael Lynch, president of Strategic Energy and Economic Research in Winchester, Massachusetts. "Uncertainty in the Middle East is always bad for oil."
Crude oil for April delivery increased 94 cents, or 0.9 per cent, to $102.01 (Dh374.62) a barrel at 10.25am on the New York Mercantile Exchange. Prices rose as much as $2.28 to $103.35. The April contract expires today. The more actively traded May futures advanced $1.29, or 1.3 per cent, to $103.14 a barrel.
Brent crude oil for May settlement climbed $1.17, or 1 per cent, to $115.10 a barrel on the London-based ICE Futures Europe exchange.
Libyan output has fallen to less than 400,000 barrels a day, Shokri Ghanem, chairman of Libya's National Oil Co, said on March 19. The country produced 1.59 million barrels a day in January, according to Bloomberg estimates.
Exports may be halted for "many months" because of sanctions and damage to facilities, the International Energy Agency said. "The likelihood of a swift normalisation of Libya crude oil production looks less and less likely after events over the weekend," Soozhana Choi, head of Asian commodities research at Deutsche Bank AG in Singapore, said in an interview with Rishaad Salamat on Bloomberg Television's On the Move Asia.
Libyan oil production halted by the country's civil war is likely to remain suspended for the rest of this year, according to JPMorgan Chase and Co.
"Our operating assumption is that there will be very little Libyan oil exported in 2011," said Lawrence Eagles, head of commodities research at JPMorgan in New York. "Clearly, political developments could change."
Yemen's president fired his cabinet yesterday after the deadliest crackdown in two months of unrest led officials close to him to resign in protest. At least 46 people were killed and hundreds injured earlier this week as police and pro-regime gunmen shot at protesters in the capital.
Syrian security forces have killed five people and injured dozens of others since March 18 during protests in the southern town of Daraa, Human Rights Watch said.