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Oil prices rise as Libyan unrest continues | Oil prices rise as Libyan unrest continues |
(about 3 hours later) | |
US crude oil prices have hit a new two-and-a-half year high amid concerns that the unrest in Libya could turn into a full-blown civil war. | |
US light crude futures for April rose by $2.02 to $106.44 a barrel, the highest price since September 2008. | |
Brent crude gained $1.53 to $117.40 a barrel nearing its recent $119.79 high. | |
Meanwhile, Asian stock markets suffered on fears rising energy prices could derail the global recovery, with the Nikkei ending the day 1.8% lower. | |
Shares also fell in Hong Kong, Sydney and Bombay, as concerns mount that the continuing unrest in Libya could send oil prices even higher. | |
The Shanghai Composite index ended the day 1.8% higher, but largely due to a surge in the value of energy companies, including a 10% jump in China Shenhua Energy Company. | |
Fear factor | Fear factor |
The US has indicated that it is considering tapping its oil reserves as one way to help ease soaring prices. | The US has indicated that it is considering tapping its oil reserves as one way to help ease soaring prices. |
But even that news failed to calm the markets as investors remained jittery about the unrest spreading to other oil-producing nations. | |
"The concern is that with what we are seeing in Libya, it's purely fear driving the market," said Jonathan Barratt of Commodity Broking Services. | "The concern is that with what we are seeing in Libya, it's purely fear driving the market," said Jonathan Barratt of Commodity Broking Services. |
"Each time the price moves up a little, people are forced into the market. Once it's feeding itself, it will continue to rise," he added. | "Each time the price moves up a little, people are forced into the market. Once it's feeding itself, it will continue to rise," he added. |
Mr Barratt said US crude prices could peak at $120 a barrel, even if further supply disruptions do not take place. |