OGJ Oil Diplomacy Editor
LOS ANGELES, Mar. 4 -- Oil prices rose above $104/bbl to their highest level in 2½ years as traders worried over fighting in Libya near the key oil export terminal of Ras Lanuf as well as the ports of Brega and Zueitina.
“Crude oil prices held strongly above $100/bbl as ongoing political unrest in Libya continues to dominate the markets,” said analyst Myrto Sokou of Sucden Financial, a London-based commodities brokerage.
That view was underlined by commodities analyst Bjarne Schieldrop of Swedish investment bank SEB, who appeared to express the growing fears of many analysts.
“The real fear has all the time been for a wider spread of the uprising across the MENA [Middle East and North Africa] region with disruptions in oil production happening not just in Libya,” Schieldorp said.
"Developments have taken place at high speed and high intensity across the MENA region so far and further developments are likely to take place sooner rather than later,” Schieldrop said.
“We thus think that the oil price has further to go on the upside before this is over,” the analyst said.
Still, even Schieldrop acknowledged, “There is currently little news with respect to any further uprising in Saudi Arabia, Iran, Oman, [and] Algeria. This is definitely calming the market at the moment.”
The analysts’ comments came as forces opposed to the 41-year rule of Moammar Gadhafi claimed the capture of key oil facilities in the country, among them Ras Lanuf, 660 km east of Libya’s capital, Tripoli.
“We have taken Ras Lanuf 100%, Gaddafi's forces have all left,” rebel soldier Hafez Ihrahim told Reuters, while Rajab Zawawei, another rebel soldier, said by phone from Ras Lanuf airport: “We have taken Ras Lanuf 100%.”
But Libya’s deputy foreign minister Khaled Kaim denied the rebel claims saying that, “The government controls it…. In Ras Lanuf, everything is calm.”
Apart from the oil export terminal, Ras Lanuf also has a 220,000-b/d refinery, which is fed by pipelines from oil fields to the south. The refinery is part of a larger facility that includes an ethylene plant and a polyethylene plant.
Al Jazeera television reported damage and fire at Zueitina, which has oil fields and a major oil export facility, while Al Arabiya television reported renewed bombardments around the oil port town of Brega, location of Libya’s second-largest oil terminal.
Contact Eric Watkins at email@example.com.