Oil prices rose to near US$113 a barrel yesterday in Asia after Libyan rebels said they would not produce crude for at least a month as they repair fields damaged by fighting.
Benchmark crude for June delivery was up US$0.52 at US$112.81 a barrel at late afternoon in Singapore in electronic trading on the New York Mercantile Exchange.
Oil markets were closed on Friday for the Easter holiday. The June contract last settled up US$0.84 at US$112.29 on Thursday.
In London, Brent crude for June delivery was up US$0.37 to US$124.36 a barrel on the ICE Futures exchange.
Fighting between forces loyal to Libyan leader Muammar Qaddafi and rebels has shutdown almost all of the OPEC nation’s 1.6 million barrels a day of oil output and contributed to a 34 percent gain in crude prices since mid-February.
Rebels said on Sunday that they will need at least four weeks to fix equipment at the key Messla and Sarir oil fields in the rebel-controlled east.
Rising crude prices have pushed gasoline above US$4 a gallon in some US states. On Saturday, US President Barack Obama said the US must develop alternatives to fossil fuel and renewed calls to end US$4 billion in subsidies for oil and gas companies.
Traders are also closely watching this week for comments by the US Federal Reserve at its meeting tomorrow and the latest US GDP figures scheduled to be released on Thursday.
Last week, signs of growing oil consumption in China and an unexpected drop in US crude supplies helped lift prices to near two-and-a-half-year highs.
“We continue to note demand strength out of the emerging economies and a gradual tightening in US petroleum balances,” Ritterbusch and Associates said in a report. “We expect a run at the US$114 level [this week] with the market ultimately pushing up to around the US$119 area within about one month.”
In other Nymex trading in contracts for next month, heating oil rose US$0.02 to US$3.23 a gallon and gasoline was flat at US$3.31 a gallon. Natural gas futures were up US$0.01 at US$4.43 per 28.3m3.
Ryanair, Transavia, Volotea and other low-cost airlines are feeling the financial pain from high jet fuel prices as a result of the Middle East war and are cutting flights. The closure of the Strait of Hormuz has taken a huge chunk of oil supplies off the market, sending the price of jet fuel soaring and triggering fears of shortages that could force airlines to cancel flights. Airlines are not waiting for a lack of supplies to react. “Travel alert: Airlines are cutting thousands of flights right now,” Travel Therapy host Karen Schaler said in an Instagram reel this past weekend.
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