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Oil above $105 as traders eye upheaval
The Associated Press
Oil prices rose March 23 after violent protests in Yemen and Syria and as the U.S. government said gasoline demand continues to rise despite sharp price increase at the pump.
Benchmark West Texas Intermediate crude for May delivery added 59 cents at $105.56 per barrel on the New York Mercantile Exchange in midday trading.
Oil prices have jumped about 24 percent since the middle of February when fighting broke out in Libya and threatened the country’s oil fields. The clash between Moammar Gadhafi and pro-democracy rebels has shut down most of the country’s oil production and experts say Libya’s exports will remain off-line for months.
The rebellion in Libya, combined with other protests in North Africa and the Middle East, has rattled energy markets and raised concerns that oil supplies will tighten as violence spreads. Prices jumped again the morning of March 23 after a bomb went off at a crowded bus stop in central Jerusalem, killing one person and wounding 20 others. Authorities called it the first major Palestinian militant attack in the city in several years.
Emergency laws in Yemen In Yemen, an important transfer point for global oil supplies, parliament on March 23 enacted emergency laws giving embattled President Ali Abdullah Saleh new powers of arrest, detention and censorship after he warned that the country could slide into a civil war as the opposition rejected his offer to step down by the end of the year.
Violent protests also had spread in southern Syria, where as many as six people were killed by security forces in the southern city of Daraa.
In Libya, fighting between rebels and government forces has halted most of the country’s 1.6 million barrels a day of crude production. Investors expect that an international military intervention launched to halt Libya’s leader crackdown will likely prolong the shutdown of oil output from the OPEC nation.
“Oil production in Libya is likely to have fallen to a quarter of its normal level ... and exports have virtually come to a halt, taking over 1 million barrels of high-quality crude oil a day off the market,” said analysts at Commerzbank in Frankfurt.
Demand up in China Meanwhile, oil demand in China, the world’s second biggest crude consumer behind the U.S., rose 10.1 percent in February from a year earlier, to the second strongest level on record, Platts reported Tuesday.
In the U.S., the Energy Information Administration reported March 23 that American motorists are so far handling higher fuel costs without cutting back. At a national average of $3.548 per gallon, retail gasoline prices remain at the highest ever for this time of year and have reached a point where economists expect consumers to start to cut spending.
The EIA said the U.S. consumed an average of 9.1 million barrels per day of gasoline, up 1.2 percent from the same period last year. Gasoline supplies also dropped last week by 5.3 million barrels, more than twice as much as expected.
In other Nymex trading for April contracts, heating oil dropped less than a penny to $3.0732 per gallon and gasoline futures added 1 cent at $3.0180 per gallon. Natural gas gained 4 cents at $4.299 per 1,000 cubic feet.
In London, Brent crude rose 2 cents to $115.66 per barrel on the ICE Futures Exchange.
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