London: Oil prices rose on Wednesday as overnight rioting in Libya added to concerns that an Egypt-style revolt could spread to oil-producing countries in the Middle East.
The latest outbreak of violence in the region drove oil markets higher on fears that civil unrest could eventually disrupt oil flows.
“Today the protest has spread to Libya ... All countries with demonstrations are trying to calm protests ... but it’s difficult to say if they are succeeding,” said Thorbj?rn Bak Jensen, an oil market analyst at A/S Global Risk Management Ltd.
Brent crude for April delivery rose by 66 cents to $102.30 a barrel at 3:17pm, hovering $2 below a 28-month peak of $104.30 on Monday.
US crude for March delivery gained 43 cents to $84.75 a barrel.
In a rare show of unrest, Libyan protesters armed with stones and petrol bombs clashed with police.. The planned release of 110 Islamist militants from Libyan jails, announced in an apparent concession to rioters, did little to quell fears the protests could gain momentum.
“The market is very jitterish, up $2, down $2, very volatile on the worry this could spread to whole region and eventually disrupt oil supplies,” Bak Jensen said.
A surprise US crude oil stockdraw of 354,000 barrels reported by the American Petroleum Institute on Tuesday contributed to upward momentum on the NYMEX after analysts had forecast a rise in supplies.
The EIA will issue a report at 9:00pm, and confirmation of the reported stockdraw could add to support for US oil prices.
“All eyes will be on the EIA inventory data coming out later to see if it confirms the decline in the API data. There are still expectations for a build in weekly crude stocks,” said Tony Nunan, a risk manager with Tokyo-based Mitsubishi Corp.
The spread between Brent in London and US oil futures hovered near $14.30 a barrel at 0937 GMT, in from highs of $16.30 a barrel last week.
US housing and inflation data also due for release later will provide further clues as the health of the world’s top energy consumer.
The dollar ceded ground against a basket of currencies heavily weighted by the euro, supported by sovereign demand and rising European shares.