Oil climbs higher on Libya conflict


Reuters

LONDON, Crude oil rose by more than US$1 on Friday, with Brent hovering around US$116, as fighting in Libya intensified with fresh reports of air strikes, and on protests in Saudi Arabia’s oil-producing Eastern Province. By 0955 GMT, Brent crude futures for April delivery were up US$1.14 to US$115.93 a barrel, after earlier touching US$116.20. U.S. crude futures for April rose 68 cents to US$102.59 a barrel, but earlier rallied by over US$1 to US$103.03. Investors and traders have been nervously tracking the civil unrest in North Africa and the Middle East for any sign that Saudi Arabia, OPEC’s leading oil producer, would be affected. On Thursday Saudi Shi’ites staged protests in two towns in its oil-producing Eastern Province, demanding the release of prisoners they say are being held without trial. In Libya, rebels calling for air strikes to set up a “no-fly” zone came under attack by a warplane for a third day as Moammar Gadhafi tried to loosen the opposition’s expanding grip on a key coast road. Commerzbank analyst Carsten Fritsch said nobody now expected Venezuelan President Hugo Chavez’s proposals for an international panel to negotiate an end to the turmoil to work. The market is also focusing on the Shi-ite protests in Saudi Arabia, although Christophe Barret, global oil analyst at Credit Agricole Corporate and Investment Bank, said he thought the risks were exaggerated. “Saudi Arabia is the main risk in the region — it has all the spare capacity, and if there is unrest and production disruption then it means an explosion in oil prices. But I think the risk is an exaggeration,” he said. Libya’s oil output has fallen to 700,000-750,000 barrels per day (bpd) from normal levels of 1.6 million bpd as most foreign oil workers have taken flight, according to Shokri Ghanem, the head of Libya’s state-owned oil company.