Oil prices soar on rising Arab tensions
Oil prices surged Tuesday as political tensions rose across the Arab world and Iran reportedly clamped down on anti-government protests.
New York’s light sweet crude for April, known as West Texas Intermediate (WTI), leapt $2.66 dollars to close at $99.63 a barrel.
In London, Brent North Sea crude for delivery in April settled at $115.42 a barrel, a sharp gain of $3.62 from Monday’s closing level.
“There are concerns now about Kuwait calling for uprising, yesterday it was Oman which is still a risk and the Libyan situation is far from being settled,” said Phil Flynn at PFG Best Research.
The New York benchmark futures contract had fallen in two of the past three trading sessions, shedding $1.13.
But it rapidly rebounded, zeroing in Tuesday close to the $100 psychological threshold which it crossed last week for the first time since October 2008. “It’s another day… another country with unrest,” said Matt Smith of Summit Energy, referring to turmoil in Iran that added to investor concerns.
Iranian security forces in Tehran fired tear gas Tuesday at anti-government protesters demanding the release of two opposition leaders they say have been jailed, opposition websites reported.
Iran has banned foreign media from on-the-spot coverage of opposition protests.
The Iranian developments “added risk premium” to the already jittery oil markets, Smith said. Although Saudi Arabia, the world’s biggest producer of petroleum products, has pledged to ensure stability on the markets, investors remained concerned about production.
Libya’s oil fields are largely in the control of opposition forces and it is unlikely that production will return to normal in the near future, analysts say.
The most serious revolt against Moamer Kadhafi’s rule in four decades has brought most of Libya’s oil production of around 1.6 million barrels a day to a standstill.
Catherine Hunter of IHS Global Insight said the eastern part of the country which is now in the hands of a loosely coordinated opposition “includes one of Libya’s four main producing areas, the Sirte Basin.”
Eastern Libya accounts for about two-thirds — about one million barrels a day — of Libya’s production. A tanker was loaded in Benghazi, the country’s second city where Kadhafi no longer has any control, with one million barrels of crude bound for China.
The tanker was the first cargo of crude to sail from Libya since February 19. Some 85 percent of Libya’s oil production goes to Europe, according to the International Energy Agency.
Source : au.finance.yahoo.com
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