Oil prices rally after Libya air strikes
2011-03-22 17:24:09
World oil prices rallied on Monday in the aftermath of Western air strikes on Libya and heightened turmoil in Yemen, both significant oil exporters.
Japan inability's to gain full control of the Fukushima nuclear plant amid meltdown fears also contributed to continued high volatility in the market, analysts said.
New York's main West Texas Intermediate contract for April ended at $102.33 dollars a barrel, up $1.26 from late Friday.
In London Brent North Sea crude brought $1.03 more at $114.96.
"It's really the continued uncertainty that we are seeing in Libya," said Matt Smith of Summit Energy.
"It was priced in to a certain extent that the supply was going to be offline for a while.
"But the involvement of the UN and Western forces have really caused prices to rally because they think it is going to make the disruption in Libya more protracted that it may have been."
Analysts at JPMorgan said they expected more volatility in a multiple-crisis environment.
"Oil prices continue to see-saw with developments in the Middle East and Japan. Potential for short-term disruptions as well as low-probability but high-impact events is driving the market," they said.
The intervention by French, American and British forces in Libya - which exported some 1.2 million barrels a day prior to the uprising against Muammar Gaddafi - has hobbled loyalist forces but offers little hint about how the situation will be resolved.
"A stalemate at current positions leaves most of the oil export ports in the hands of the Gaddafi regime," noted PetroMatrix analyst Olivier Jakob in Zurich.
"Oil prices have gone up due to military attacks in Libya from UN forces," said Victor Shum, an analyst at energy consultants Purvin and Gertz.
"More oil installations could be damaged due to collateral damage and internal sabotage," Shum told AFP.
Combined with unrest elsewhere, he said, "oil supply disruption is going to support prices in its triple digits."
In London, the Centre for Global Energy Studies warned that the tightening market is in danger of repeating the 2008 price surge when crude futures topped $147 a barrel.
It said the oil market needed "a clear unambiguous signal" from the OPEC cartel that the lost Libyan production would be replaced.