The price of Brent crude oil jumped to a 32-month high above $125 this evening as commodities prices generally climbed due to a weaker dollar. Attacks on Libyan oil fields also made long-term supply cuts more likely.
In addition to the Libyan conflict, ongoing unrest in the Middle East and bomb attacks intended to postpone Nigerian elections added to oil supply concerns.
Brent crude rose $2.71 to $125.38 a barrel, having earlier hit $125.79, the highest level since August 2008. US crude rose $1.43 to $111.73.
Libyan unrest has cut its normal output of 1.6 million barrels per day (bpd) by 80% to between 250,000 and 300,000 bpd, according to a senior government official.
Libya's fellow OPEC member Nigeria, which produces 1.9 million bpd, postponed parliamentary elections again in some areas, although polls will go ahead in most of the country on Saturday as planned.
Crude prices rallied in step with gains across the commodities markets, where gold hit a record high, driven by a weaker dollar and a positive global outlook despite Portugal's request for a bail-out earlier this week.
A weaker dollar often lifts dollar-denominated commodities because they become attractive as a hard-asset inflation hedge and demand can be stoked by cheaper prices for consumers using other currencies.
Meanwhile, gold rose to a record high for a fourth straight day as a weaker dollar and inflation worries lifted bullion above $1,470 an ounce. The metal has risen more than 10% since late January when political unrest began to flare in the Middle East and North Africa.
Spot gold rose as high as $1,474.19 an ounce and was later up 1% at $1,472.70 an ounce.
