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Oil prices hit fresh highs on Libya unrest fears Oil prices hit fresh highs on Libya unrest fears
(40 minutes later)
Oil prices have continued to climb, hitting their highest levels in two-and-a-half years, amid fears the unrest in Libya could spread to larger oil producing nations. Oil prices have continued to climb, hitting their highest levels in two-and-a-half years, amid fears the unrest in Libya could spread to larger oil producing nations and disrupt supplies.
Brent crude hit $119.79 a barrel in early Thursday trade, before falling back to $116.80.Brent crude hit $119.79 a barrel in early Thursday trade, before falling back to $116.80.
US light crude was up $3.65 at $101.80 a barrel, but earlier it had reached $103.41.US light crude was up $3.65 at $101.80 a barrel, but earlier it had reached $103.41.
The last time prices were this high was in August 2008. Oil firms have been suspending production in Libya this week.
Analysts are predicting more gains may be on the way. France's Total, Spanish oil firm Repsol and Italy's ENI have all partly suspended operations.
Austrian firm OMV also suspended operations and Germany's Wintershall said it had shut down operations which produced up to 100,000 barrels of oil per day.
Asian stocks
The last time prices were this high was in August 2008 and analysts are predicting more gains may be on the way.
The high oil price weighed on Asian stock markets, and trading was mixed.The high oil price weighed on Asian stock markets, and trading was mixed.
Japan's Nikkei 225 index lost 0.9% while South Korea's KOSPI shed 0.7%. Indexes in Singapore, Australia and India also declined.Japan's Nikkei 225 index lost 0.9% while South Korea's KOSPI shed 0.7%. Indexes in Singapore, Australia and India also declined.
Markets in Hong Kong, Shanghai and Taiwan posted modest gains.Markets in Hong Kong, Shanghai and Taiwan posted modest gains.
"It's not a very good day," said Jackson Wong, vice president at Tanrich Securities in Hong Kong."It's not a very good day," said Jackson Wong, vice president at Tanrich Securities in Hong Kong.
"The market is still trending down because of high oil prices, high commodity prices because of the Middle East unrest," added Mr Wong."The market is still trending down because of high oil prices, high commodity prices because of the Middle East unrest," added Mr Wong.
Supply worriesSupply worries
Oil prices have been rising for months, but the uprising in Libya has caused a sharp increase in crude costs.Oil prices have been rising for months, but the uprising in Libya has caused a sharp increase in crude costs.
Libya is the world's 12th-largest exporter of oil, with the majority of its output going to Europe.Libya is the world's 12th-largest exporter of oil, with the majority of its output going to Europe.
Supply concerns were amplified after French oil giant Total said it has started to shut down its oil operations in Libya.
Other oil companies have made similar moves in recent days.
Barclays Capital estimates that so far about one million barrels per day of production has been shut down.Barclays Capital estimates that so far about one million barrels per day of production has been shut down.
"The futures market may be forced to price in a major loss of Libya's output for at least a few weeks," Ritterbusch & Associates said in a report."The futures market may be forced to price in a major loss of Libya's output for at least a few weeks," Ritterbusch & Associates said in a report.
The report also predicts that continuing instability in the Middle East will probably keep pushing prices up into the spring.The report also predicts that continuing instability in the Middle East will probably keep pushing prices up into the spring.
"This still feels like a market that is far from achieving a top," Ritterbusch & Associates said."This still feels like a market that is far from achieving a top," Ritterbusch & Associates said.
Price risesPrice rises
The International Energy Agency and Saudi Arabia have promised to increase supplies in order to cover any shortfalls.The International Energy Agency and Saudi Arabia have promised to increase supplies in order to cover any shortfalls.
However, that has not eased the tensions in the oil markets.However, that has not eased the tensions in the oil markets.
Analysts say if oil prices keep climbing, it could push up the cost of fuel and food. This would hit consumers in the pocket and could result in slower economic growth and weaker corporate earnings.Analysts say if oil prices keep climbing, it could push up the cost of fuel and food. This would hit consumers in the pocket and could result in slower economic growth and weaker corporate earnings.
"It would nail the economy," said Mark Zandi of Moody's Analytics."It would nail the economy," said Mark Zandi of Moody's Analytics.