Oil climbs on escalated Libya tensions

Oil climbs on escalated Libya tensions

Published on: February 21, 2011 at 10:55

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SINGAPORE (Commodity Online) : World oil prices advanced further in Asian trade Monday as political tensions spread to more countries including major oil producer Libya.

Light sweet crude for March delivery, which will expire Tuesday, was seen trading at $87.37 a barrel at 12.00 noon Singapore time while April delivery jumped to $91.35 a barrel.

In London, Brent crude for April delivery was at $103.54 a barrel.

Analysts said the black gold is likely to advance further during the day Benchmark on worries of oil supply disruptions as unrests over authoritarian governments in the Middle East escalate to more countries.

Concerns over Middle East oil supplies helped prices recover from early weakness after China raised its banks' reserve requirements last Friday for the second time this year to combat rising inflation.

According to China’s National Development and Reform Commission, gasoline and diesel prices will go up 350 yuan per ton starting Sunday.

In the US, Monday was a holiday and that may also led to increased volatility in U.S. crude prices, analysts added. Asian traders were reluctant to hold on to short positions till trading restarts in the United States on Tuesday.

Unconfirmed reports said more than 400 people have been died in protests in Libya since protests broke out across the North African nation six days ago.

At least 200 people had died in the eastern city of Benghazi alone while protests have also reportedly broken out in other cities, including Bayda, Derna, Tobruk and Misrata.

In the capital, Tripoli, supporters of the government took to the streets in large numbers, and security forces prevented large demonstrations against Muammar Gaddafi's 42-year reign.

On Friday, US crude for March delivery fell 16 cents to settle at $86.20 a barrel, off an $87.88 intraday peak. March crude did manage a 62-cent gain for the week.

In contrast, US April crude rose 87 cents, or 0.98 percent, to settle at $89.71 a barrel after jumping to a $90.96 peak. All the US crude futures contracts except front-month March finished higher.

ICE Brent crude for April delivery fell 7 cents to settle at $102.52, but rose 1.07 percent for the week, a fourth straight weekly rise. Wednesday's Brent intraday peak of $104.52 was the highest since September 2008.