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Oil nears $107 a barrel

The crisis in Libya is again pushing oil higher as the New York Mercantile Exchange opens for trading. Benchmark West Texas Intermediate crude for April delivery gained 83 cents Monday at $105.25 a barrel on the Nymex.

business Updated: Mar 07, 2011 21:39 IST

The crisis in Libya is again pushing oil higher as the New York Mercantile Exchange opens for trading. Benchmark West Texas Intermediate crude for April delivery gained 83 cents Monday at $105.25 a barrel on the Nymex. The price almost hit $107 per barrel earlier in electronic trading, the highest since Sept. 26, 2008.

In London, Brent crude added 64 cents at $116.61 per barrel on the ICE Futures exchange.

Libya, which sits on the largest oil reserves in Africa, has been engulfed in a four-week rebellion as militants try to oust Moammar Gadhafi after 41 years in power. Officials in the country say the country's oil fields continue to operate, but experts say that the Libya's daily shipments of more than 1 million barrels will likely be cut off for some time to come.

The fighting could last for weeks, or months, and international oil companies have pulled their workers to safer locations. With no clear leader in charge of the country, analysts say the world cannot depend on Libya's exports. Saudi Arabia has increased production to make up for the loss of Libyan crude, which goes mainly to Europe, but that puts a tighter squeeze oil supplies as the global economy recovers and consumption rises.

The Energy Information Administration estimates OPEC can crank up production by another 4-5 million barrels per day.