Oil hits $100 mark

Wednesday, February 23, 2011

NEW YORK - US crude oil price crossed $100 a barrel Wednesday, hitting the triple digits for the first time since October 2008, as violence in Libya caused anxiety in oil markets, Xinhua reported.

On Wednesday, heavy gunfire broke out in Libya’s capital Tripoli, causing concerns that weighted the oil markets.

After Libyan leader Muammar Gaddafi said in a defiant speech Tuesday that he would not step down, promising tougher action against rebels, analysts feared long-lasting supply disruptions or even permanent damage to the oil industry in OPEC nations.

Much of Libya’s oil producing capacity and port operations are in the eastern part of the country where according to reports the government has lost most political control.

Oil firms that operate in Libya have been suspending production and evacuating workers. Italian ENI, Repsol of Spain, Total of France, Statoil of Norway and BASF of Germany, have halted much if not most of their oil production in Libya and moved personnel out of the country. Others, including the British giant, BP, said earlier that they were evacuating workers.

In a research note, Barclays Capital estimated that around one million barrels a day of production has been halted, or more than half the country’s total production of about 1.6 million barrels a day.

Light, sweet crude for April delivery soared $2.68, or 2.81 percent to settle at $98.10 a barrel on the New York Mercantile Exchange, advanced nearly 10 percent in two trading sessions, while the Brent crude rallied above $110 a barrel in London, also its multi-year high.

Filed under: Economy

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