Oil jumps as Libya clashes intensify; Mideast worry
Brent oil prices pushed above $116 a barrel and U.S. oil jumped more than $3 to its highest since September 2008 on Friday, as fighting in Libya worsened and protests in the Middle East intensified. Investors piled into the oil market fearing extended supply disruptions in Libya as rebels fought security forces in Ras Lanuf, a major oil terminal. And growing unrest in Bahrain and Yemen ratcheted up anxiety over Saudi Arabia, where Saudi Shi'ites staged protests on Thursday. Prices closed out a second big air yeezyweekly gain with news that hedge funds and big speculators had increased their bullish bets on U.S. oil prices by over 30 percent in the week to March 1, taking their net long position to a record high as they braced for further turbulence in the region. "Tension in the Middle East is like a runaway train," said Michael Hewson, an analyst at CMC Markets in London. "Once it starts, it's very difficult to stop. And if there is a danger that it impacts the supply chain, people will understandably get nervous." Brent crude futures for April delivery rose $1.18 to settle at $115.97 a barrel, having reached a high of $116.49. Brent posted a 3.4-percent gain for the week, after rising 9.4 percent last week. U.S. crude for April delivery rose $2.51 to settle at $104.42 a barrel, the highest close since September 2008. West Texas Intermediate crude outpaced Brent for a third day, thanks to an upbeat U.S. jobs report and as traders took profits on short positions in the Brent/WTI spread after it hit a record $16.91 last week. Brent's premium to its U.S. counterpart fell $1.33 to $11.55 a barrel, based on settlement prices, continuing to retreat from last week's record $16.91. U.S. crude late reached a high of $105.17 in after-hours trade. The U.S. move was aided by data showing U.S. nonfarm payrolls rose more than forecast in February, hitting a nine-month high, and the jobless rate slipped to a nearly two-year low of 8.9 percent. News of refinery maintenance in Europe that will help offset the loss of Libyan crude also weighed on Brent. Libyan leader Muammar Gaddafi's forces battled rebels on several fronts as the country's crisis worsened and unrest erupted in the capital. Rebels drove Gaddafi's forces from Ras Lanuf and have taken the eastern oil town, two rebel soldiers told Reuters by telephone. Al Jazeera television reported that an oil facility at Zueitina, south of Benghazi was damaged and on fire. Estimates of how much Libyan oil output is shut continued to creep higher, with the International Energy Agency revising up its estimate to 1 million barrels per day (bpd).