Saturday, March 5, 2011

Oil jumps as Libya clashes intensify; Mideast worry

(Reuters) - Brent oil prices pushed above $116 a barrel and U.S. oil jumped more than $3 to its highest since September 2008 on Friday, as fighting in Libya worsened and protests in the Middle East intensified.

Investors piled into the oil market fearing extended supply disruptions in Libya as rebels fought security forces in Ras Lanuf, a major oil terminal. And growing unrest in Bahrain and Yemen ratcheted up anxiety over Saudi Arabia, where Saudi Shi'ites staged protests on Thursday.

Prices closed out a second big weekly gain with news that hedge funds and big speculators had increased their bullish bets on U.S. oil prices by over 30 percent in the week to March 1, taking their net long position to a record high as they braced for further turbulence in the region.

"Tension in the Middle East is like a runaway train," said Michael Hewson, an analyst at CMC Markets in London. "Once it starts, it's very difficult to stop. And if there is a danger that it impacts the supply chain, people will understandably get nervous."

This articles was taken from Reuters.

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