Fin24

Mideast crisis sends oil up

2011-03-17 09:32

Singapore - World oil prices rose in Asian trade on Thursday afternoon as dealers turned their attention to unrest in the Middle East from the Japanese nuclear crisis, analysts said.

New York's main contract, light sweet crude for delivery in April, gained 43 cents to $98.41 per barrel while Brent North Sea crude for May was up 20c to $110.80.

Crude prices reversed earlier losses as Middle Eastern tensions came to the fore, said Victor Shum, senior principal for Purvin and Gertz energy consultants in Singapore.

"It is the volatility of the markets as the markets weigh the importance of the nuclear crisis in Japan and unrest in the Middle East," he said.

"Concerns of unrest in the Middle East outweigh concerns of the nuclear crisis in Japan."

Fresh violence roiled the region on Thursday, with five people killed when Bahraini police crushed a pro-democracy protest in Pearl Square in the capital Manama while six opposition activists were arrested.

In oil exporter oil Libya, strongman Moamer Kadhafi said on state television that his forces would fight a "decisive battle" on Thursday to recapture rebel-held Misrata, the country's third city.

Libya was producing 1.69 million barrels before the unrest, according to the International Energy Agency. Of this 1.2 million were exported, mostly to Europe. Other major customers are China and the United States.

Crude markets had fallen in the morning, mirroring a dip in Japanese equities, as investors fretted over Japan's worsening nuclear crisis with the Fukushima power plant hit by four blasts since Friday's quake and tsunami.

However, Tokyo's Nikkei stock index ended Thursday down 1.44%, paring earlier heavy losses, as television images showed Japanese military helicopters dumping water on the plant in a bid to douse radioactive fuel rods.

Traders fear the disaster could affect crude consumption in Japan, the world's third largest economy and the third largest oil-consumer.