Unrest continues in other parts of Middle East, North Africa
By Polya Lesova and Virginia Harrison, MarketWatch
LONDON (MarketWatch) — Crude futures rallied Monday, with the Brent benchmark topping $104 a barrel, as violent political unrest in Libya raised worries about a potential disruption in oil supplies from the North African nation.
April Brent crude rose $1.80, or 1.8%, to $104.32 a barrel in morning trading on the ICE Futures exchange.
It earlier hit an intraday high of $104.60 a barrel.
“Everybody is looking right now at Libya, because it’s a significant oil producer,” said Christophe Barret, global oil analyst at Calyon in London.
“That is the main factor supporting prices,” he said. “And then you have the unrest continuing in other countries [in the region.]”
A wave of pro-democracy demonstrations has swept the Middle East and North Africa after protests led to the toppling of the long-time rulers of Tunisia and Egypt. The countries that have seen demonstrations in recent days include Yemen, Bahrain, Libya and Morocco.
Libya is a major oil producer and a member of the Organization of Petroleum Exporting Countries. It holds the largest proven oil reserves in Africa, followed by Nigeria and Algeria, according to data from the U.S. Energy Information Administration.
U.S. markets are closed for Presidents Day on Monday, but oil prices rose in electronic trading.
Oil for March delivery (CLH11 89.72, +3.52, +4.08%) , the front-month contract which expires Tuesday, rose $2.11, or 2.5%, to $88.31 a barrel in electronic trading on Globex.
Oil for April delivery (CLJ11 93.42, +3.71, +4.14%) , the more actively traded contract, rallied $2.55, or 2.8%, to $92.26 a barrel.
Demonstrations intensified in Libya over the weekend, as protestors attempt to end the 42-year rule of the country’s leader Moammar Gadhafi.
On Sunday the son of the Libyan leader appeared on state television and warned protesters that they risked inciting a civil war in which Libya’s oil wealth “will be burned,” the Wall St Journal reported on its website.
Human Rights Watch estimates the death toll from four days of protests in cities across Libya is at least 223, according to a report on its website on Monday.
Protests extended into Morocco for the first time over the weekend, and demonstrations continued in Bahrain and Iran.
Unfolding protests in the Middle East and North Africa have underpinned oil prices in recent weeks.
Analysts at ClearView Energy Partners said in a recent note that the events “have significant potential to impact petroleum supply, during and after any transition to a new government, because the nations undergoing turmoil contribute a meaningful share to global liquids production.”
