Oil near $103 as allied coalition bombs Libya
Monday, March 21, 2011; 2:05 AM
SINGAPORE -- Oil prices jumped to near $103 a barrel Monday in Asia after Libyan leader Moammar Gadhafi vowed a "long war" amid a second night of allied strikes in the OPEC nation.
Benchmark crude for April delivery was up $1.82 to $102.89 a barrel at midday Singapore time in electronic trading on the New York Mercantile Exchange. The contract fell 35 cents to settle at $101.07 per barrel on Friday.
In London, Brent crude was up $1.83 at $115.76 a barrel on the ICE futures exchange.
A military coalition of the U.S., France, U.K. and other nations bombed tanks and anti-aircraft sites Sunday and deterred Libyan fighter jets from flying. Gadhafi said he would not resign and pledged to continue to attack the eastern rebel stronghold of Benghazi.
Fierce fighting during the last month has already shut down most of Libya's 1.6 million barrels per day of crude output. Investors are now concerned international intervention could extend the conflict and keep Libya's oil production out of the market longer than perviously estimated.
"The regime in Tripoli shows no sign of giving up," Capital Economics said in a report. "The prolonged loss of Libyan oil could push prices all the way up to the highs above $140 seen in 2008."
Gadhafi also warned that Western powers would not get Libya's oil, suggesting his forces may sabotage crude installations. Some traders worry a cornered Gadhafi could lash out in a last stand that disrupts regional tanker shipments.
"A 'scorched earth' response from Gadhafi could cause disruptions to ships traveling the Mediterranean," energy consultant The Schork Report said.
In other Nymex trading for April contracts, heating oil was up 3.9 cents at $3.06 a gallon and gasoline added 5.1 cents to $3.00 a gallon. Natural gas gained 3.1 cents at $4.20 per 1,000 cubic feet.