Oil prices soar to 30-month high amid uprisings
Oil prices climbed to their highest level in 30 months in London today as Libya's uprising reduced shipments and sparked fears of unrest spreading across the Middle East.
Brent crude hit 119 US dollars a barrel for the first time since August 2008, while benchmark crude for April delivery on the New York Mercantile Exchange was up nearly four dollars at 101.67 US dollars.
Major Western oil companies, such as Italian firm Eni and Spain's Repsol-YPF, have suspended production, while British giant BP has evacuated staff.
Ongoing fears over the impact of soaring oil prices on economic prospects meant the FTSE 100 Index fell by 1% at one stage today.
Meanwhile, a group of petrol retailers predicted the rise in Brent crude will filter through to British forecourts in the next few weeks, leading to an estimated 5p per litre increase by April 1.
Brian Madderson, chairman of RMI Petrol, the petrol retailers' association, said: "This is further bad news for motorists and forecourts as this increase looks set to coincide with the introduction of the previous Government's ill thought-out fuel duty escalator adding a further 5p per litre at the pump - in total a 10p-per-litre jump."
Some analysts fear Nymex crude could break its 2008 record of around 147 US dollars if the political unrest spreads to countries such as Iran and Saudi Arabia.
Michael Hewson, an analyst at CMC Markets, said oil prices were being pushed up by a combination of restricted production and speculation.
"There has been disruption to production - but Libya accounts for only 2% of the world's oil supply," he said.
"However, Europe takes about 50% of its oil from Libya and will have to source oil from elsewhere and possibly pay more for it."
He added: "The real concern is that Opec (Organisation of the Petroleum Exporting Countries) won't be able to step up production if the contagion spreads to Saudi Arabia. Libya is just one piece of the puzzle."
Mr Hewson said investors were also concerned that Algeria and Iran could be dragged into the turmoil spreading across North Africa and the Middle East.
He said many of the predictions for oil prices - some suggesting it could hit 220 US dollars a barrel - were "outlandish".
The unrest has spread from Tunisia and Egypt, but Libya is the first major oil exporter to be hit by the turmoil.
Hundreds of Libyans have been killed in violent clashes between anti-government protesters and forces loyal to dictator Colonel Muammar Gaddafi in recent days. Col Gaddafi is refusing to relinquish power, vowing to fight to his "last drop of blood".
Libya is the world's 12th largest exporter of oil and Barclays Capital estimates about one million barrels per day of production has been shut down.
The International Energy Agency (IEA), an independent organisation which works to ensure stable supply of energy to its 28 member countries, said it was "ready, as always, to make oil available to the market in the event of a major supply disruption".
- 1 Autistic teenager beaten up by bullies makes them watch 20-minute video about autism
- 2 Nathan Collier: Montana man inspired by same-sex marriage ruling requests right to wed two wives
- 3 Saudi preacher who 'raped and tortured' his five -year-old daughter to death is released after paying 'blood money'
- 4 Chris Moyles reportedly set to make radio comeback with new breakfast show on XFM
- 5 The Greece debt crisis explained in less than 100 words
Hilary Swank: Million Dollar Baby star says she turns down roles to care for elderly father
Autistic teenager beaten up by bullies makes them watch 20-minute video about autism
The Greece debt crisis explained in less than 100 words
Eiji Tsuburaya: Monster movie pioneer honoured in interactive Google Doodle
Bakery sends 'horrific' version of Frozen-themed birthday cake to unsuspecting customer
More Britons believe that multiculturalism makes the country worse - not better, says poll
Osborne to cap family benefits at £23,000 – announced ahead of his post-election Budget
Nathan Collier: Montana man inspired by same-sex marriage ruling requests right to wed two wives
Forget little green men – aliens will look like humans, says Cambridge University evolution expert
Girl, 7, stares down hate preacher at Ohio festival with pro-LGBT rainbow flag gesture
Sickness and disability benefits could be reduced by £30 a week as part of £12bn welfare cuts
iJobs Money & Business
£40000 - £95000 per annum: Recruitment Genius: This is an exciting opportunity...
competitive: SThree: Are you passionate about sales?Do you have a keen interes...
£17000 - £30000 per annum: Recruitment Genius: This is an exciting opportunity...
£15000 - £17000 per annum: Recruitment Genius: This company offers a range of ...