Libya and Japan push up oil price

• Oil rises $2 a barrel with Brent crude now $116 • Uncertainty over how long Libyan supplies will be disrupted • Reports Japan has bought all available stock of some types of crude The price of oil jumped by more than $2 a barrel on Monday morning, driven higher by the military action in Libya and strong demand from Japan. As Operation Odyssey Dawn continued in the Middle East, the cost of a barrel of Brent crude gained $2.29 to $116.22. US crude rose by the same amount, to $103.35. Analysts have predicted that the strikes against Colonel Gaddafi could push oil above its recent highs, with Brent tipped to rise above $120 a barrel. “The sell-off in the oil price on Friday afternoon proved to be short-lived with the events in the Middle East over the weekend lifting oil back to its recent highs this morning,” said Jane Foley, senior strategist at Rabobank. The oil price has been unsettled in recent weeks. Brent broke through the $100 a barrel mark in early February as the Egyptian uprising took hold. The Libyan conflict has added to the pressure, with the International Energy Agency predicting that the country’s oil output will be severely curtailed for some time. Libya is one of the largest oil producers in the region, but production had already almost stopped. Military operations in the region could also hamper supplies from other countries. But some analysts are confident that Saudi Arabia can increase its supplies to compensate. Mike Wittner, head of commodities research at Société Générale, said oil traders were trying to calculate how long Libyan production could be offline. “We could end up by having two countries or a protracted civil war,” he said. With Japan’s nuclear power industry disrupted by the earthquake and tsunami , the country is now buying more oil to cover its energy gap. Reuters reported that Japan has bought all the available stock of some types of crude oil in the Asian markets, which is expected to push prices higher. In the UK, the high oil price has led to record petrol prices. Chancellor George Osborne is expected to scrap scheduled increases in fuel duties in Wednesday’s budget, and also freeze air passenger duty . Oil Commodities Petrol prices Libya Japan disaster Graeme Wearden guardian.co.uk

Posted by on March 21, 2011. Filed under News, Politics, World News. You can follow any responses to this entry through the RSS 2.0. You can skip to the end and leave a response. Pinging is currently not allowed.