Fin24

Oil prices jump above $103

2011-03-18 09:55

ec

Singapore - Oil prices rose above $103 a barrel on Friday in Asia as traders worried the United Nation's authorisation of military strikes against forces loyal to Libyan leader Moammar Gadhafi could prolong the conflict and threaten oil exports.

Benchmark crude for April delivery was up $1.59 at $103.01 a barrel at midday Singapore time in electronic trading on the New York Mercantile Exchange. The contract added $3.44 to settle at $101.42 on Thursday.

In London, Brent crude was up $1.24 at $116.14 a barrel on the ICE futures exchange.

The UN Security Council on Thursday authorized "all necessary measures" short of a ground offensive to stop Gadhafi forces from snuffing out a monthlong rebel uprising. This week, the government's superior firepower pushed rebels back to their eastern stronghold of Benghazi.

As his forces advanced to within about 130km of the city, Gadhafi said there would be "no mercy or compassion" for those who resist.

Fierce fighting in Libya has damaged oil operations and cut most of the Opec nation's 1.6 million barrels a day of crude output.

"The intensity of fighting and the targeting of oil facilities and installations has been a shock to many observers," Cameron Hanover said in a report. "This decision by the UN would seem to extend the fighting for a period of time."

Oil fell earlier this week to below $97 on investor concern last week's massive earthquake and tsunami in Japan would crimp crude demand as the world's third-largest economy struggles to recover. Attention then turned Thursday to Libya and a violent crackdown on anti-government protesters in Bahrain.

"The oil market is confused and in a state of roiling uncertainty," Cameron Hanover said.

In other Nymex trading for April contracts, heating oil was up 1.8c at $3.09 a gallon and gasoline added 2.5c to $2.98 a gallon. Natural gas fell 2.4c at $4.13 per 1 000 cubic feet.