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Oil prices push higher on Libya supply concerns | |
(about 2 hours later) | |
Oil prices have continued to climb after Libya's Col Gaddafi refused to stand down and investors feared unrest could worsen across the region. | |
US light, sweet crude was up $0.61 at $96.03 - its highest for two years. It has now risen almost $10 since the start of the week. | |
Brent crude in London was $1.58 higher to $107.36 in early trading. | |
Two major European oil companies have suspended production amid continued anti-government unrest in Libya. | |
Stock markets in Asia were little changed after dropping on Tuesday. Investors said they are gauging the impact of Libyan unrest on the global economy and corporate profit growth. | |
Major shift? | Major shift? |
Libya is the world's 12th-largest exporter of oil and the majority of its output goes to Europe. | |
"Global investors are now trying to decide if the Middle East crisis means a major shift of geopolitical balance of power in the region," said Masayuki Kubota of Daiwa SB Investments. | "Global investors are now trying to decide if the Middle East crisis means a major shift of geopolitical balance of power in the region," said Masayuki Kubota of Daiwa SB Investments. |
He added that there could be "more instability and possible further oil price rises". | He added that there could be "more instability and possible further oil price rises". |
Spanish oil firm Repsol and Italy's ENI both said on Tuesday that they were suspending production in the North African country. | |
"The major underlying fear in the market is that these protests spread in the region to even larger producers like Saudi Arabia," said Andy Lebow, a trader at MF Global in New York. | "The major underlying fear in the market is that these protests spread in the region to even larger producers like Saudi Arabia," said Andy Lebow, a trader at MF Global in New York. |
"While that might not look likely right now, even a hint of real problems there could send prices vertical." | "While that might not look likely right now, even a hint of real problems there could send prices vertical." |
On Tuesday, International Energy Agency chief economist Fatih Birol said oil prices were in the danger zone. | On Tuesday, International Energy Agency chief economist Fatih Birol said oil prices were in the danger zone. |
He said they could rise further if turmoil continued in the Middle East and that may slow the recovery from the global economic crisis. | |
"The global economy is more fragile now than it was in 2008," Mr Barratt said. | "The global economy is more fragile now than it was in 2008," Mr Barratt said. |
"Growth has been driven by stimulus packages and austerity measures. I don't see it being able to absorb a rise to $140 like it did two years ago." | "Growth has been driven by stimulus packages and austerity measures. I don't see it being able to absorb a rise to $140 like it did two years ago." |