Brent oil price soars above $108 on Libya unrest

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London, Feb 22 (AFP) Oil spiked above USD 108 today asbloody violence in key North African exporter Libya sparkedfresh concerns about stability across the Middle East.

Tensions in the region were also stoked by news thattwo Iranian naval ships passed through the Suez Canal todayinto the Mediterranean for the first time since 1979, on atraining mission that Israel calls a provocation.

Brent North Sea crude for delivery in April jumped toUSD 108.57 per barrel in morning trade, the highest levelsince early September 2008. It later pulled back to USD105.98, up 24 cents from yesterday''s closing level.

New York''s light sweet crude for March delivery jumpedUSD 4.69 to USD 90.89 in the first day of physical trading onthe New York Mercantile Exchange since violence escalated inOPEC member Libya over the weekend.

Protests, which led to ouster of autocratic leaders inboth Tunisian and Egyptian, are now spreading to other Arabstates in the strategic crude-producing Middle East and NorthAfrica region.

"The market remains very jittery, trading on sentimentand rumour, while fears for Libya are added by concerns ofunrest spreading to other states like Algeria and even SaudiArabia -- although this is unlikely," said VTB Capital oilanalyst Andrey Kryuchenkov.

"Until tensions calm down in the Middle East and NorthAfrica, we are likely to remain well underpinned," he added.

United Arab Emirates Energy Minister Mohammad binDhaen al-Hamli, speaking on the sidelines of aproducer-consumer meeting in the Saudi capital Riyadh ontoday, said that the market was being driven by Middle Eastunrest.

Saudi Oil Minister Ali al-Naimi added that OPEC isprepared to meet any shortage of supplies due to unrest in theMiddle East and that its members have sufficient sparecapacity to do so.

Libya is Africa''s fourth largest crude producer afterNigeria, Algeria and Angola, with production of 1.8 millionbarrels per day and estimated reserves of 42 billion barrels.

(AFP)

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