Oil for April delivery rose for a fourth day in New York as violence escalated in Libya, bolstering concern supplies will be disrupted as turmoil spreads through the Middle East and North Africa. Crude gained as much as 2.2 percent after Libyan leader Muammar Qaddafi’s son warned that a civil war would risk the country’s oil wealth. Security forces have launched attacks on anti-government protesters, killing more than 200 people, according to New York-based Human Rights Watch. The North African nation, holder of the largest crude reserves on the continent, pumped 1.6 million barrels a day of oil in January, equivalent of about 8 percent of U.S. consumption. “The tensions in the Middle East, particularly in Libya with the uprising against Qaddafi, is having an impact,” Ben Westmore, a minerals and energy economist at National Australia Bank Ltd. in Melbourne, said by telephone today. “It’s not a Saudi Arabia or an Iran, but it would have an impact on the market balance if you were to see oil supply limited because of these conflicts.” Crude for April delivery rose as much as $1.99 to $91.70 a barrel in electronic trading on the New York Mercantile Exchange, and was at $91.29 at 12:55 p.m. Singapore time. It climbed 87 cents to $89.71 on Feb. 18. The less actively traded March contract, which expires tomorrow, gained $1.01 to $87.21. New York crude has outpaced Brent futures traded in London, narrowing the spread between the April contracts to $12.31 a barrel from $12.81 on Feb. 18. Floor trading in New York is closed today for the U.S. Presidents Day holiday. Brent for April settlement on the London-based ICE Futures Europe exchange increased as much as $1.20, or 1.2 percent, to $103.72 a barrel. On Feb. 18, it slipped 7 cents to $102.52. Contagion Risk Libya, the eighth-largest oil producer among those with quotas in the Organization of Petroleum Exporting Countries, has become the focal point of region-wide protests ignited by the ouster of Tunisia’s president last month and energized by the fall of Egypt’s President Hosni Mubarak last week. Violence has flared in Yemen, Djibouti and Bahrain as governments sought to crack down on calls for reform. Demonstrations also were reported yesterday in Iran and Morocco. “There is also the continued risk that this contagion will spread into Iran or another country in the region that is more important to the global oil market,” said Westmore at National Australia Bank. Price Swings Oil-price swings have doubled this year as the turmoil spreads through the Arab world. New York crude’s 20-day historical volatility has risen to 27.4, according to data compiled by Bloomberg. It was at 12.6, an all-time low, at the end of December. Officials from more than 90 nations including Saudi Arabian Oil Minister Ali al-Naimi and U.S. Deputy Energy Secretary Daniel Poneman will gather in Riyadh tomorrow to seek ways of curbing fluctuations. Protests in Bahrain, provoked by discontent among the majority-Shiite Muslim population, have sparked concern violence will spread to neighboring Saudi Arabia, which holds one-fifth of the world’s oil. Saudi Arabia has a Shiite minority concentrated in its eastern oil-producing hub. Countries in North Africa and the Middle East were responsible for 36 percent of global oil output and held 61 percent of proved reserves in 2009, according to BP Plc, which publishes its Statistical Review of World Energy each June. Iran, with output of 3.72 million barrels a day, is OPEC’s second-biggest producer after Saudi Arabia, according to Bloomberg News estimates. To contact the reporter on this story: Ben Sharples in Melbourne at bsharples@bloomberg.net To contact the editor responsible for this story: Clyde Russell at crussell7@bloomberg.net

Source