Oil Is Near Two-Year High on Concern Libya Unrest May Spread

Oil Is Near Two-Year High on Concern Libya Unrest May Spread ; Oil traded near the highest in more than two years in New York after intensifying violence in Libya stoked concern that crude supplies will be disrupted as turmoil spreads through the Middle East and North Africa.

Futures in New York yesterday surged 6.4 percent from the Feb. 18 settlement, while London-traded Brent rose to the highest since September 2008. Muammar Qaddafi vowed to fight a growing rebellion in Libya, holder of Africa’s largest oil reserves, until his “last drop of blood.” The Organization of Petroleum Exporting Countries will be ready to increase output if a supply-shortage develops, Saudi Arabian Oil Minister Ali al-Naimi said yesterday.

“It’s still the risk that this contagion spreads to Saudi Arabia or Iran, and production in those regions are also tied up,” said Ben Westmore, a minerals and energy economist at National Australia Bank Ltd. in Melbourne. “OPEC could step in and increase production to offset that if they needed to.”

Crude for April delivery was at $95.51 a barrel, up 9 cents, in electronic trading on the New York Mercantile Exchange at 9:24 a.m. Singapore time. Yesterday, it increased $5.71 to $95.42, the highest since October 2008. Futures are 21 percent higher than a year ago.

The March contract, which expired at the close of floor trading yesterday, surged $7.37, or 8.6 percent, to $93.57.

Brent oil for April settlement on the London-based ICE Futures Europe exchange climbed for a third day, gaining as much as 48 cents, or 0.5 percent, to $106.26 a barrel.

OPEC Production

Saudi Arabia, the largest oil exporter and the biggest producer in OPEC, has 4 million barrels a day of spare capacity, al-Naimi said at a press conference at the ministerial meeting of the International Energy Forum in Riyadh. All the world’s producers, including Saudi Arabia, could pump an additional 6 million barrels, he said.

Countries in North Africa and the Middle East were responsible for 36 percent of global oil output and held 61 percent of proved reserves in 2009, according to BP Plc, which publishes its Statistical Review of World Energy each June.

Libya has become the focal point of protests ignited by the ouster of Tunisia’s president and energized by the fall of Egypt’s President Hosni Mubarak. For the latest updates PRESS CTR + D or visit Stock Market news Today

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