Oil prices soared to near $93 a barrel Tuesday in Asia as Libyan leader Muammar Qadhafi struggled to maintain his grip on power in the OPEC nation amid violent protests calling for his resignation.
Benchmark crude for March delivery was up $6.75 at $92.95 a barrel at midday Singapore time in electronic trading on the New York Mercantile Exchange. Markets were closed Monday in the U.S. for a holiday. The contract last settled Friday, down 16 cents at $86.20.
In London, Brent crude for April delivery gained $1.21 to $106.95 a barrel on the ICE Futures exchange.
Key Libyan government officials at home and abroad have resigned and air force pilots defected amid a bloody crackdown on protests in the capital of Tripoli that follow weeks of demonstrations in neighbouring Egypt that ousted the long-serving president. At least 233 people have been killed so far in the Libyan uprising.
Concern among traders is growing that some of Libya’s crude exports of 1.0 million barrels a day could be affected as foreign oil companies evacuate staff from the country. Traders are also eyeing protests in Iran, the second-largest producer in the Organization of Petroleum Exporting Countries.
“Unlike Egypt, Libya is a significant producer of crude and we may be seeing the largest disruptions since the start of the second Gulf War,” energy consultant The Schork Report said.
Analysts are also worried the jump in energy costs could hurt consumer spending and stymie a fragile recovery in developed countries. The crisis in the Middle East and North Africa, which has brought down governments in Tunisia and Egypt and sparked protests in Yemen, Bahrain, Iran, and Jordan, has added about $10 to the price of crude, according to Capital Economics.
“An additional $10 on the price of oil is not insignificant, particularly for weaker economies in Europe facing a major fiscal squeeze,” Capital Economics said in a report. “Given the pace at which events are unfolding it would be daft to rule out a spike to $140 or beyond in the coming weeks if the unrest disrupts output from the larger oil producers.”
In other Nymex trading in March contracts, heating oil rose 11.2 cents to $2.82 a gallon and gasoline gained 10 cents to $2.65 a gallon. Natural gas futures were up 9.2 cent at $3.97 per 1,000 cubic feet.