Oil prices rise on concerns about Libya and supplies

Posted By: Pti
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Asian Trade
New York, Mar 21: Oil prices today climbed as energy experts warned that Libya's oil exports could be off the world market longer than expected, and countries including the US enforced a no-fly zone over Libya.

Traders also fretted about other uprisings in the Middle East and how much they would affect production among OPEC heavyweights Saudi Arabia and Iran.

Benchmark West Texas crude for May delivery gained USD 1.47 at USD 103.32 per barrel at midday on the New York Mercantile Exchange.

The Apr contract, which ends tomorrow, rose USD 1.36 to USD 102.43 per barrel. Prices climbed after another violent weekend in Libya. Muammar Gaddafi vowed a long war as allied forces smashed his air defences.

A top French official today said international intervention could last awhile. Oil traders said they're increasingly concerned about political stability in North Africa and the Middle East, which produces 27 per cent of the world's oil. The Libyan uprising has halted that country's exports, and experts said it's unclear when oil shipments will resume.

Markets hate uncertainty, analyst and trader Stephen Schork said. "Could this be a protracted no-fly zone like the one we saw in Iraq" following the Persian Gulf War? Protests in Yemen, Bahrain and Syria also are destabilising the Middle East, a region that includes Saudi Arabia and Iran, two of the top three oil exporters in the world. Combined, Saudi Arabia and Iran produce 12.4 million barrels of oil per day.

Analyst Jim Ritterbusch said he expects oil prices will swing up and down this week as traders react to headlines out of the Middle East.

Meanwhile analysts said Japan will increase imports of fossil fuels to replace power lost from nuclear reactors damaged in the massive earthquake and tsunami that struck that country. Several idled oil refineries also were put back online last week.


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