Clashes in oil producer Libya sent the price of Brent crude oil above $105 a barrel this evening on fears that supplies to Western countries could be disrupted, while US prices rallied by more than $4.
US crude oil prices were $3.99 higher at $90.19 a barrel, while Brent was up $2.30 at $104.82. Brent had earlier hit a 30-month high of $105.15.
Libya produced 1.58 million barrels per day in January, and major disruptions in the oil-rich North African country would present serious strategic challenges for Western governments.
Italy looks set to bear the brunt of a fall-out if Libya descends further into chaos, but oil company Eni today said output there had proceeded normally over the past 24 hours.
European oil and gas companies have evacuated staff and suspended drilling preparations in Libya as violence spreads across the north African country.
A wave of popular unrest in North Africa and the Middle East has already toppled long-time leaders in Tunisia and Egypt, and traders are watching events carefully in other members of the Organisation of the Petroleum Exporting Countries (OPEC) for signs of escalating tension.
Analysts said the biggest concern on oil markets was that the current unrest could spread to Saudi Arabia.
