Oil prices held near 2-1/2 year highs on Tuesday, with Brent crude topping $121 a barrel as unrest in oil exporting countries in the Middle East and Africa outweighed China's fourth interest rate hike since October.
Diplomatic efforts to end the war in Libya remained stalled as clashes over the oil town of Brega continued while Western air strikes continued to target Libyan leader Muammar Gaddafi’s military power.
The stalemate fuelled fears of a prolonged loss of oil exports from Libya despite reports that a first cargo of crude oil is due to be loaded by rebels on Tuesday.
Brent crude was 1 cent up at $121.1 a barrel after closing at $121.1 a barrel on Monday, the highest since August 1, 2008.
US crude was 47 cents lower at $108.0 a barrel after settling at $107.8 on Monday, the highest since September 2008.
“It’s looking overbought and we might see a bit of a correction now, but now that Brent has broken above $120 it’s hard to put a top on it,” said Rob Montefusco, an oil trader at Sucden Financial.