Oil futures rise more than $2/bbl on Libya worries

21 March 2011 03:09  [Source: ICIS news]

SINGAPORE (ICIS)--Global crude futures rose by more than $2/bbl (€1.40/bbl) on Monday after the US and other western governments began a military offensive against Libya, fuelling fears of further supply disruptions in the region.

Worries over protests, which are calling for changes in government and political reform in key oil producer Saudi Arabia, Yemen and Syria, also fuelled the hike in oil futures.

At 09:35 hours Singapore time (01:35 GMT), WTI crude for April rose $2.01 to $103.08/bbl, while Brent crude for May delivery was up $1.91 at $115.84/bbl.
Brent futures had earlier risen by $2.26 to $116.19/bbl on Monday.

“Price volatility looks set to rise in the near-term,” said the Commonwealth Bank of Australia in a daily research report.

US President Barack Obama on Saturday authorised a military campaign against Libya, but said that the US would not send ground forces to Libya, according to media reports.

The US launched cruise missile attacks on Saturday, with strikes along the Libyan coast that targeted air defence installations around capital city, Tripoli, and a rebel stronghold near Benghazi, the reports said.

Coalition forces comprising the UK, US, France, Italy and Canada also launched strikes against Libya on Saturday to enforce a UN-mandated no-fly zone.

The coalition began its action hours after forces loyal to Libyan leader Muammar Gaddafi attacked Benghazi despite declaring a ceasefire a day earlier.

Meanwhile in the Middle East, protesters in Syria set fire to the headquarters of the ruling Baath Party, while Yemeni President Ali Abdullah Saleh on Sunday fired his government as he faced increasing pressure from the streets to step down, a Reuters report said.

In Saudi Arabia, crowds of relatives of jailed Saudis protested outside the interior ministry in the capital, Riyadh, on Sunday to demand information about prisoners who have been held for years without trial, media reports said.

Public protests are illegal in Saudi Arabia and plans for massive political demonstrations in the past few weeks have failed to materialise because of extensive police presence.

Saudi Arabian ruler King Abdullah earlier offered $93bn worth of wage increases, jobs and construction projects on 18 March, but did not make any political concessions.

($1 = €0.70)

By: Nurluqman Suratman

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