Libyan turmoil triggers new rally in oil prices

Oil prices strengthened last night as traders kept a nervous eye on the UN-mandated air strikes on Libya, which holds Africa's largest crude oil reserves.

The Opec member is the world's 17th largest and Africa's number three producer, behind Nigeria and Angola, with its pre-crisis output levels of around 1.6 million barrels per day equivalent to almost 2 per cent of global consumption.

Concerns about the strikes, and the uncertainty regarding the country's political future, were supplemented by worries about unrest in Syria and Yemen, where a leading general spoke in support of protesters. Protests in Saudi Arabia's close neighbour Bahrain were also on traders' minds.

The tensions drove Brent crude futures for May delivery to $115.4 per barrel, up $1.52 or 1.3 per cent in late afternoon trading. The US crude contract for April delivery, which expires today, was about $1.4 higher at $102.5 per barrel.

Beyond the Middle East, investors also kept a close watch on the news coming out of quake-hit Japan, with reports of smoke emanating from one of the country's damaged nuclear reactors stoking concern across the already jittery commodity markets.