Fears for the global recovery intensified last night as the price of crude oil leapt amid worsening violence in Libya.
Traders made bets on the chances of crude hitting $200 a barrel as fears increased about unrest spreading across the Middle East.
In London, Brent crude, Europe’s benchmark contract, traded at $115.75 a barrel after surpassing the $118 mark earlier in the day. In America, the price of crude to rose to $105.28 a barrel after earlier touching $106.95 a barrel, the highest since 2008.
OPEC countries Kuwait, the United Arab Emirates and Nigeria have reportedly boosted oil output in an attempt to make up for the disruption in Libya.
Meanwhile, in Saudi Arabia, OPEC’s biggest oil producer, some websites have called for a nationwide “Day of Rage” this month, fanning fears that the Arab revolt could spread.
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Ministers from the OPEC countries, which are responsible for 40 per cent of global oil supplies, are holding informal consultations over soaring oil prices and the Libyan crisis, but they are not said to be planning an emergency meeting. The group holds two ordinary meetings a year, the next being slated for June.
“There is no need for nervousness ... [oil] supply and stocks are at comfortable levels,” Qatar’s oil minister Mohammed Al Sada said yesterday.
The oil industry is attempting to calculate the loss of output caused by the continuing fighting in Libya, with the International Energy Agency estimating that about half of Libya’s oil output of 1.6 million barrels a day had been suspended as a result of the unrest. About 85 per cent of its oil is exported to Europe.
European Central Bank president Jean-Claude Trichet said the surge in crude prices only heightened inflationary risks and that central bankers were united in their determination to anchor down inflation expectations.
Libya, an OPEC member, is Africa’s third biggest oil producer and holds the largest reserves of crude on the continent. Its output equates to about 2 per cent of global oil production.