Oil Rises in New York as Libyan Violence Intensifies, Refinery is Bombed
By Ben Sharples and Christian Schmollinger - Mar 10, 2011
Oil climbed in New York for the first time in three days as escalating violence in Libya, Africa’s third-largest producer, renewed concern that supply disruptions may spread to the Middle East.
Futures rose as much as 0.6 percent as fighting shut Libya’s biggest oil refinery. Violence has cut exports by two- thirds, according to the International Energy Agency. Brent futures in London advanced for a second day as forces loyal to Muammar Qaddafi attacked oil facilities. In Saudi Arabia, the world’s biggest exporter, websites have called for a “Day of Rage” tomorrow, New York-based Human Rights Watch said.
“Reports are showing the fighting in Libya is escalating,” Serene Lim, an energy and commodity strategist at Australia & New Zealand Banking Group Ltd. in Singapore, said by telephone today. “Every threat of further unrest will definitely support prices.”
Crude for April delivery gained as much as 59 cents to $104.97 a barrel in electronic trading on the New York Mercantile Exchange. It was at $104.79 at 2:27 p.m. Singapore time. Yesterday, the contract dropped 64 cents to $104.38. Prices are 28 percent higher than a year earlier.
Brent crude for April settlement added as much as 61 cents, or 0.5 percent, to $116.55 a barrel on the London-based ICE Futures Europe exchange. Yesterday, it advanced $2.88, or 2.6 percent, to $115.94, after Bank of America Merrill Lynch said prices could surge above $140 in the second quarter.
The violence has cut output in Libya by as much as 1 million barrels a day, according to the IEA. The North African country pumped 1.39 million barrels a day in February, down from 1.59 million the previous month, based on Bloomberg estimates.
Warplanes sent from Qaddafi’s home region of Sirte struck the Ras Lanuf refinery, the country’s largest crude-processing plant, Al Jazeera television said. The nation’s biggest oil terminal, at the port of Sidra, was hit and part was in flames, Al Jazeera said.
Demonstrations have toppled leaders in Tunisia and Egypt, and protests have erupted in energy-exporting countries including Iran, Oman and Yemen. Oil surged to a record $147.27 a barrel on July 11, 2008, before plunging 78 percent in the next five months to a low of $32.40 as the financial crisis unfolded.
Saudi Arabia is capable of providing additional oil output if needed to counter supply disruptions caused by the unrest in the Middle East, James Smith, U.S. ambassador to the kingdom, said in an Bloomberg Television interview on “InBusiness with Margaret Brennan.” The kingdom has increased oil production by 1 million barrels a day and has the capacity to pump another 3.5 million, Smith said.
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