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US oil prices settle above $102

New York – US oil price rose on Wednesday and settled for the first time above $100 since September 2008, as unrest in Libya continued and US crude inventories dropped.

Crude Oil extraction

Crude Oil extraction

On Wednesday, airstrikes took place close to the oil fields in Libya – sparking further fears among investors and traders that the supply disruption of this OPEC member state would continue.

Libya’s National Oil Corporation Chairman Shokri Ghanem estimated that Libya’s oil output has been reduced to 700 000 from 750 000 barrels per day because of the departure of most foreign workers. He said if the unrest continued, oil price could hit $130 dollars a barrel this month.

Anxieties about long-term oil supply were further increased by the instability of other countries in the area of North Africa and Middle East.

Meanwhile, the Energy Information Administration reported that US crude inventories fell 400 000 barrels to 346.4 million barrels in the week ending 25 February, ending its six weeks of straight rise.

Experts expected oil prices to keep rising as supply disrupted at the time of demand picked up.

Light, sweet crude for April delivery gained $2.60, or 2.61 percent to settle at $102.23 dollars a barrel on the New York Mercantile Exchange – having surged about 20 percent since the breakout of Libya’s unrest.

In London, Brent crude also surged and last traded around $117 dollars a barrel. – BuaNews-Xinhua

Libya turmoil boosts oil, equities restrained

Oil prices charged to a fresh 2-1/2 year high Monday as traders eyed increasing violence in major producer Libya, feeding fears about rising inflation and unsettling other markets.

Libya Oil

Libya Oil

European equities fell on a combination of uncertainty over the future of the oil price, increasing signs that higher interest rates may be coming and more evidence of a surprisingly poor earnings season.

Together, they overshadowed reports of solid economic growth. U.S. markets were closed for a national holiday.

Gold powered to the highest levels in seven weeks, helped along by both inflation fears and risk aversion.

Protests broke out in the Libyan capital Tripoli for the first time following days of unrest in the city of Benghazi and some army units defected to the opposition in what has become one of the bloodiest revolts to convulse the Arab world.

Financial markets are particularly sensitive to the violence in Libya because it exports around 1.1 million barrels per day of crude.

Brent oil was up around $2 a barrel at $104.47 slightly below a new 2-1/2 year high hit earlier.

“There is uncertainty about supplies. Markets don’t like uncertainty,” said Bernard McAlinden investment strategist at NCB Stockbrokers.

Rising oil prices, meanwhile, feed into inflation, one of the main current concerns of investors, who are otherwise in a generally bullish mood on expectations that the global economic recovery is now sustainable.

MSCI’s all-country world stock index was down 0.1 percent with the FTSEurofirst 300 declining nearly 0.7 percent.

The European weakness came despite euro zone manufacturing data above consensus and the strongest Ifo sentiment data out of Germany since reunification.

European stocks have been hit by mixed earnings. Thomson Reuters Proprietary Research reported Monday that the number of European companies missing fourth quarter expectations is outpacing those beating them.

The earnings growth rate, actual and predicted, for the STOXX 600 is 18.9 percent, compared with a December estimate of 36.1 percent.

Shares in Carlsberg, for example, fell Monday after the brewer posted a surprise fall in fourth-quarter operating profit.

source Reuters – Libya turmoil boosts oil, restrains equities

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