London Brent oil prices briefly topped $116 a barrel this evening as global supply concerns deepened amid worsening violence in Libya.
Brent North Sea crude for delivery in April rallied to $116.18, before later pulling back to $115.55, up $2.49 from yesterday's closing level.
But New York prices slid after news of a larger than expected jump in American crude oil inventories. The main contract, light sweet crude for April, known as West Texas Intermediate (WTI), eased 12 cents to $104.90.
Analysts said that Brent crude oil surged above $116 a barrel, led by renewed concerns about tensions in Libya that forced a shutdown of one of the biggest oil refineries of the country.
In recent days, oil has spiked to two and a half year highs amid escalating violence and supply shortfalls in Libya, which is a major producer and exporter of crude.
Saudi Oil Minister Ali Naimi has downplayed market fears about global shortages from the crisis, saying yesterday that his kingdom has extra output capacity of 3.5 million oil barrels a day.
Elsewhere, the US government's Energy Information Administration said that US crude inventories climbed by a larger than expected 2.5 million barrels in the week ending March 4.
But the EIA also revealed that US petrol stockpiles sank by 5.5 million barrels. In addition, distillates - which include diesel and heating fuel - dipped by four million barrels.
