Brent crude shoots above $123 per barrel

6th April 2011, Comments 0 comments

Oil prices jumped past $123 on Wednesday for the first time since late 2008 as traders mulled the outlook for supplies amid unrest in Libya, and as they digested the latest snapshot of US energy stocks.

At 1400 GMT, Brent crude reached $123.37 a barrel -- the highest level since early August 2008. Brent North Sea for delivery in May later stood at $122.56, up 33 cents compared with Tuesday's close.

New York's main contract, West Texas Intermediate (WTI) or light sweet crude for May, hit $109.15 -- a level last seen in September 2008. It later stood at $108.81 a barrel, up 41 cents.

"Brent crude oil continued its rally ... as the political turmoil in Libya, Yemen and Bahrain raised further concerns about oil supplies in the area," said Sucden analyst Myrto Sokou.

Meanwhile, the US government's Department of Energy announced Wednesday that American crude stockpiles rose by two million barrels last week. Analysts had forecast a slightly smaller increase.

The weekly data is closely watched as the United States is the world's biggest consumer of oil.

Traders' eyes were also on Libya, whose oil exports have ground to a halt due to the violent unrest there.

In the rebel-held east of the country, a tanker left the Libyan port of Tobruk on Wednesday carrying the first consignment of oil since the rebel government won recognition from some countries, an AFP journalist reported.

The Greek-owned, Liberian-registered tanker left a terminal near Tobruk, 130 kilometres (80 miles) from the Egyptian border.

It had docked a day earlier in order to load Libyan crude worth up to 100 million dollars, the first such exports since international coaltion air strikes began on March 19 and destined to finance the rebel fight against leader Moamer Kadhafi's forces.

As it suffers from fuel shortages, Kadhafi's government has imported 19,000 tonnes of gasoline (petrol), a source close to the state oil company said on Wednesday.

Most of the service stations in Tripoli are closed due to a lack of supplies.

Bank of America Merrill Lynch said in a market note that a persistent rise in oil prices caused by unrest in Libya and the Middle East could slow global economic growth.

"Some additional upward pressure on commodities should not upset the economic recovery, as long as it is transitory," it said.

However, "a persistent uplift in Brent crude oil prices above $130 this year could create severe economic damage," it warned.


© 2011 AFP

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