Brent crude oil prices rose this evening, while US crude reached the highest level for two and a half years due to concerns that a revolt in Libya could spread to other major oil producers.
US crude was up $4.75 at $94.49 a barrel, while Brent crude gained 75 cents to $106.49, after earlier touching $108.57, near Monday's high of $108.70.
Both oil contracts gave up some gains after comments from the Saudi Arabian oil minister that Saudi Arabia and other OPEC members were ready to meet any shortage from disruption caused by the spreading unrest.
Libya produces around 1.6 million barrels of oil per day, and OPEC has spare capacity of up to six million barrels, so even if all exports were stopped this would not create a supply shortage, said one analyst.
Libya is the third-largest oil producer in Africa, and has Africa's largest proven oil reserves at 44 billion barrels, according to the US Energy Information Administration.
Trading sources reported that operations at Libyan oil ports were disrupted by a lack of communications.
Repsol, the Spanish oil and gas company, said that it had suspended all operations in Libya, including stopping oil production from the El-Sharara field.
This followed staff evacuations by other European oil and gas firms such as Shell while German company Wintershall has wound down production as a precautionary measure.
Iran has also stopped its oil-related activities in Libya and will evacuate staff in the next 48 hours.
Saudi Arabia is hosting the International Energy Forum in Riyadh today and attendees have been voicing their concern about rising oil prices. The talks aim to narrow the gap between producer and consumer nations, but the turmoil in Libya has overshadowed the event, forcing ministers to send messages of reassurance to the market.
