Oil jumped to the highest in more than two years as violence intensified in Libya, stoking concern crude supplies will be disrupted as violence escalates around the Middle East and North Africa.
New York futures for April delivery rose as much as 9.8 percent from the close on Feb. 18, while London-traded Brent surged to the highest since September 2008, as soldiers deserted Libyan leader Muammar Qaddafi’s government and diplomats resigned. The country, holder of the largest crude reserves on the African continent, pumped 1.6 million barrels a day of oil in January, equivalent of about 8 percent of U.S. consumption.
“Oil is being bought on the risk that this contagion will spread through the Middle East,” Jonathan Barratt, managing director of Commodity Broking Services Pty in Sydney, said by telephone today. “This effect is a knee-jerk reaction to the fact that this could spread.”
Crude for April delivery rose as high as $98.48 and was at $96.50 a barrel in electronic trading on the New York Mercantile Exchange at 11:37 a.m. Singapore time. It settled at $89.71 on Feb. 18. Floor trading was closed yesterday for the Presidents Day holiday and electronic trades will be booked today for settlement purposes.
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