The price of US crude oil briefly surged past $104 this evening to strike the highest level for two and a half years, as traders reacted to worsening violence in Libya.
US crude went as high as $104.09 a barrel - a level last seen on September 29 2008. It later stood at $103.45, up $1.54 from Thursday's closing level. Brent crude rallied as high as $116.30 before pulling back to $115.77, up 98 cents.
Brent prices remain off the highs near $120 that were hit last week as violence flared in Libya, where opponents of leader Moamer Gadaffi have taken control of swathes of the east of the country.
The Middle East and North Africa region has been rocked by unrest since an uprising in Tunisia in January brought down the government there and led to similar protests in Egypt which ousted president Hosni Mubarak.
Oil had fallen slightly on Thursday as investors digested Venezuela's proposal for an international peacekeeping mission to avert civil war in Libya. But prices resumed their upward path on the back of doubts about Venezuela's proposal to mediate in the crisis, analysts said.
The head of Libya's National Oil Corporation, Shukri Ghanem, told AFP on Thursday that the country's oil production had been halved, mainly due to the departure of foreign workers who feared for their safety.
Libya produces around 1.6 million barrels a day, some 85% of which normally goes to Europe, according to the International Energy Agency.
