Libya tension sees oil price increase
Oil prices rose to nearly $103 a barrel today as traders worried that United Nations authorisation of military strikes against Muammar Gaddafi's forces could prolong the conflict and threaten oil exports.
Benchmark crude for April delivery was up $1.53 dollars at $102.95 a barrel at late afternoon Singapore time in electronic trading on the New York Mercantile Exchange.
In London, Brent crude was up $1.11 at $116.01 a barrel on the ICE futures exchange.
Fierce fighting in Libya has damaged oil operations and cut most of the Opec nation's 1.6 million barrels a day of crude output.
Energy price specialists Cameron Hanover said in a report: "The intensity of fighting and the targeting of oil facilities and installations has been a shock to many observers. This decision by the UN would seem to extend the fighting for a period of time."
Oil fell earlier this week to below 97 dollars on investor concern that last week's massive earthquake and tsunami in Japan would affect crude demand as the world's third-largest economy struggles to recover.
Attention turned yesterday to Libya and a violent crackdown on anti-government protesters in Bahrain.
"The oil market is confused and in a state of roiling uncertainty," Cameron Hanover said. "As long as there is unrest in Bahrain, oil prices will find it hard to sell off."
