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02-24-2011, 05:31 AM
http://www.reuters.com/
(Reuters) - Oil surged more than 7.5 percent to its highest since August 2008 on Thursday on concern unrest in Libya could spread to other major oil producers in the Middle East, including Saudi Arabia.
Brent crude futures for April spiked up $8.54 per barrel to a peak of $119.79 before easing back to around $114.00 by 5.35 a.m. EST.
Disruption stemming from the revolt in the world's 12th-biggest exporter has cut at least 400,000 barrels per day (bpd) from Libya's 1.6 million bpd output, according to Reuters calculations.
ENI Chief Executive Paolo Scaroni provided an estimate of a much more dramatic fall in Libyan output.
"There are 1.2 million barrels (per day) less on the market," Scaroni told reporters in Rome.
Eastern areas holding much of Libya's oil have slipped from the control of Muammar Gaddafi, who has unleashed a bloody crackdown on protesters to keep his 41-year grip on power.
Goldman Sachs said the spread of unrest to another producing country could create severe oil shortages and require demand rationing.
"The market cannot accommodate another disruption, in our view, with the problems in Libya potentially absorbing half of OPEC's spare capacity," analyst Jeffrey Currie said in a research note.
SAUDI SUPPLIES
Reuters market analyst Wang Tao said technical charts showed Brent could be on course for a rise to $158 per barrel in 2011, well above its 2008 high of $147.50, while he expected U.S. crude to touch $159 per barrel.
U.S. crude for April delivery rose as high as $103.41, the highest September 2009. It was up $2.50 at $100.59 at 1035 GMT.
The cuts from Libya represent the first disruption to supply as a direct result of protests that have swept through the oil-producing regions of North Africa and the Middle East.
The concern for oil markets is how unrest might affect Saudi Arabia, which not only pumps around 10 percent of the world's oil but is also the only holder of significant spare crude production capacity that can be used to plug outages.
Without Saudi Arabia's 4 million bpd of spare capacity, there is little margin in the global oil supply system to deal with output disruption.
Senior Saudi sources said on Thursday the kingdom could supply high quality, light oil to replace any lost Libyan crude.
(Reuters) - Oil surged more than 7.5 percent to its highest since August 2008 on Thursday on concern unrest in Libya could spread to other major oil producers in the Middle East, including Saudi Arabia.
Brent crude futures for April spiked up $8.54 per barrel to a peak of $119.79 before easing back to around $114.00 by 5.35 a.m. EST.
Disruption stemming from the revolt in the world's 12th-biggest exporter has cut at least 400,000 barrels per day (bpd) from Libya's 1.6 million bpd output, according to Reuters calculations.
ENI Chief Executive Paolo Scaroni provided an estimate of a much more dramatic fall in Libyan output.
"There are 1.2 million barrels (per day) less on the market," Scaroni told reporters in Rome.
Eastern areas holding much of Libya's oil have slipped from the control of Muammar Gaddafi, who has unleashed a bloody crackdown on protesters to keep his 41-year grip on power.
Goldman Sachs said the spread of unrest to another producing country could create severe oil shortages and require demand rationing.
"The market cannot accommodate another disruption, in our view, with the problems in Libya potentially absorbing half of OPEC's spare capacity," analyst Jeffrey Currie said in a research note.
SAUDI SUPPLIES
Reuters market analyst Wang Tao said technical charts showed Brent could be on course for a rise to $158 per barrel in 2011, well above its 2008 high of $147.50, while he expected U.S. crude to touch $159 per barrel.
U.S. crude for April delivery rose as high as $103.41, the highest September 2009. It was up $2.50 at $100.59 at 1035 GMT.
The cuts from Libya represent the first disruption to supply as a direct result of protests that have swept through the oil-producing regions of North Africa and the Middle East.
The concern for oil markets is how unrest might affect Saudi Arabia, which not only pumps around 10 percent of the world's oil but is also the only holder of significant spare crude production capacity that can be used to plug outages.
Without Saudi Arabia's 4 million bpd of spare capacity, there is little margin in the global oil supply system to deal with output disruption.
Senior Saudi sources said on Thursday the kingdom could supply high quality, light oil to replace any lost Libyan crude.