Wednesday, February 23, 2011

U.S. crude oil futures climb to a 2-1/2-year peak

(Reuters) - U.S. crude futures climbed to a 2-1/2-year peak on Wednesday on concern that unrest in Libya could spread to other top oil producers in the region and cut more output.

Violent clashes in Libya have resulted in at last three oil companies halting output in Africa's third-largest producer, which pumps 1.6 million barrels per day (bpd), or nearly 2 percent of global supply.

The disruptions mark the first reduction in oil supply stemming from a wave of protests that have swept through the oil-producing Middle East and North Africa. Investors fear for the potential impact on the flow of oil from top exporter Saudi Arabia if it suffers similar unrest.

U.S. crude rose as high as $96.08 a barrel, the highest level since October 2008. By 11:59 a.m. ET, the April contract had trimmed gains to trade at $95.48, up 6 cents on the day.

Brent crude rose 58 cents to $106.36 a barrel, after rising as high as $106.58 earlier. On Monday, Brent hit a 2-1/2-year high of $108.70.

"Even if Libya completely shuts down, there isn't a supply issue. But the (U.S. crude) could go to $100, given the potential for this contagion to spread to Saudi Arabia," said Jonathan Barratt, managing director of Commodity Broking Services in on

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