Oil rises to near $105 as Libya crude output drops

The Associated Press
Thursday, March 10, 2011; 12:43 AM

SINGAPORE -- Oil prices rose to near $105 a barrel Thursday in Asia after Libya said its crude production has fallen more than previously estimated amid fresh battles near key oil installations.

Benchmark crude for April delivery was up 41 cents at $104.79 a barrel at midday Singapore time in electronic trading on the New York Mercantile Exchange. The contract lost 64 cents to settle at $104.38 on Wednesday.

In London, Brent crude was up 29 cents at $116.23 a barrel on the ICE futures exchange.

Libya's oil production has been cut to 500,000 barrels a day from 1.6 million since a rebellion against Moammar Gadhafi began last month, National Oil Corp. chief Shukri Ghanem said Wednesday. Ghanem had previously estimated the OPEC nation's output had been reduced by about half.

Fierce fighting on Wednesday between rebels and forces loyal to Gadhafi damaged the country's largest oil refinery and storage complex at Ras Lanouf.

"Oil was responding mainly to an escalation of fighting in Libya that is seeing more action concentrated at or near oil installations," Ritterbusch and Associates said in a report.

In other Nymex trading for April contracts, heating oil was up 1.5 cents at $3.09 a gallon and gasoline rose 1.5 cents to $3.04 a gallon. Natural gas was down 1.5 cents at $3.92 per 1,000 cubic feet.

© 2011 The Associated Press