By Virginia Harrison and Kim Hjelmgaard, MarketWatch
LONDON (MarketWatch) — Oil futures surged in electronic trading on Tuesday, as the specter of fresh violence hung over the Mideast and North Africa, as oil producers moved to curb output in Libya and as widespread protests threatened Col. Moammar Gadhafi’s grip on the nation.
Oil for March delivery (CLH11 93.40, +7.20, +8.35%) , the front-month contract, which expires later Tuesday, gained $7.89, or 9.1%, to $94.07 a barrel, from Friday’s settlement price on the New York Mercantile Exchange.
Oil for April delivery (CLJ11 96.73, +7.02, +7.83%) , the more actively traded contract, rose $8.29, or 9.2%, from Friday’s settlement price, to $97.89 a barrel.
“Rising violence in Libya and Bahrain” is “providing support to oil prices, with geopolitics a key focus of the market,” wrote strategists at Barclays Capital in a note.
In Libya, violent clashes between police and protesters spread to Tripoli and the nation’s autocratic leader, Gadhafi, appeared to lose control of some eastern parts of the country to anti-regime forces, The Wall Street Journal reported on its website.
There were also reports that military aircraft had fired on some pro-democracy demonstrators.
The Libyan leader made a brief appearance on television Tuesday in a bid to ease fears of his whereabouts. Gadhafi is reported to have said: “I am in Tripoli and not in Venezuela.”
The Journal also reported that Wintershall, the oil-and-gas exploration arm of Germany’s BASF AG (DE:BAS 58.96, -0.64, -1.07%) (BASFY 84.18, +1.11, +1.34%) and one of the largest operators in Libya, was shutting around 100,000 barrels a day of output.
BASF’s shares were last down about 2% on the Frankfurt Stock Exchange.
Libya is the largest oil producer in North Africa, at 1.6 million barrels of crude oil a day, and exports around 1.1 million barrels a day, according to Commerzbank strategists.
The nation is the latest in a string of countries within North Africa and the Mideast to experience political uprisings in recent weeks.
The escalation of violence prompted credit-rating firms to cut the credit ratings of Libya and Bahrain on Monday. Read more on rating moves.
