Oil prices jumped above $111 a barrel Friday in Asia as fighting in Libya damaged crude installations in the OPEC nation and a weaker dollar makes commodities cheaper for investors with other currencies.
Benchmark crude for May delivery was up 88 cents at $111.18 a barrel at midday Singapore time, the highest since September 2008, in electronic trading on the New York Mercantile Exchange. The contract rose $1.47 to settle at $110.30 on Thursday.
In London, Brent crude for May delivery was up 63 cents to $123.30 a barrel on the ICE Futures exchange.
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Crude output in Libya slowed to a trickle this week as forces loyal to Muammar Qadhafi attacked the country’s largest oil field in the rebel-controlled east, rebels said. Most of Libya’s 1.6 million barrels a day of crude production had already been shut down by nearly two months of fighting.
Rebels were able to sell a shipment of 1 million barrels Wednesday but damage to their oil fields has all but halted production. Output in the government-held west has collapsed as sanctions target Libyan state oil activities.
“Traders have been worried that a dragged-out civil war might ultimately damage or destroy Libyan oil installations,” Cameron Hanover said in a report.
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A weaker dollar also boosted oil prices since that makes dollar-based commodities such as crude cheaper for trader with other currencies. The euro rose to $1.4390 on Friday from $1.4316 late Thursday.
In other Nymex trading in May contracts, heating oil rose 1.6 cents to $3.22 a gallon and gasoline gained 2 cents to $3.21 a gallon. Natural gas futures were up 0.5 cents at $4.06 per 1,000 cubic feet.