Revolutionizing Awareness

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Oil rises as Libyan unrest disrupts supplies

Posted by Admin on February 23, 2011

http://news.yahoo.com/s/nm/20110222/bs_nm/us_markets_oil;_ylt=Alr_cjnQRICBiLJNFjuLIDZ34T0D;_ylu=X3oDMTJrc2l2ZHE4BGFzc2V0A25tLzIwMTEwMjIyL3VzX21hcmtldHNfb2lsBHBvcwMzMgRzZWMDeW5fYXJ0aWNsZV9zdW1tYXJ5X2xpc3QEc2xrA2Z1bGxuYnNwc3Rvcg–

Protesters stand in the street in this undated ...

Protesters stand in the street in this undated picture made available on Facebook February 20, 2011

NEW YORK (Reuters) – Brent crude rose and U.S. oil hit a 2-1/2 year high on Tuesday as the revolt in Libya disrupted the OPEC nation’s supplies and raised concern unrest could spread to other oil producing countries in the region.

More than 8 percent of Libya’s 1.6 million barrels per day (bpd) of oil production has been shut down by the political violence, with Italian ENI and Spain’s Repsol shutting in output.

Trade sources said the country’s marine oil terminals were disrupted by a lack of communications as rebel soldiers said the eastern region of the country had broken free from Muammar Gaddafi. Libya also declared force majeure on all oil product exports, traders said.

Oil gave up some early gains after Saudi Arabian Oil Minister Ali al-Naimi said that the Organization of the Petroleum Exporting Countries would be ready to meet any shortage from a supply disruption.

Brent crude traded up 76 cents to $106.50 a barrel at 11:44 a.m. EST, off earlier highs of $108.57 a barrel. Brent hit a 2-1/2 year high of $108.70 a barrel on Monday.

U.S. crude for March delivery, which expires at the end of the session, rose $5.65 to $91.85 a barrel, after touching $94.49 a barrel, which was the highest level since October 2008. The more actively traded April contract gained $5.15 to trade at $94.86 a barrel.

The stronger gains in U.S. crude was partly explained by the fact that while the contract was active in electronic trading on Monday, there was no settlement as the exchange in New York was closed for the Presidents Day holiday.

“Geopolitical events have sparked a move higher as oil prices have rocketed on the headlines out of Libya,” said Chris Jarvis, president of Caprock Risk Management in Hampton Falls, New Hampshire.

Saudi Arabia’s Naimi, speaking on the sidelines of the International Energy Forum in Riyadh, said worldwide oil spare oil capacity was between 5-6 million bpd.

(Reporting by Matthew Robinson, Gene Ramos, David Sheppard in New York; Claire Milhench in London and Francis Kan in Singapore; Editing by David Gregorio)

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