Oil Tops $104 Per Barrel
Source: Associated Press, Chris Kahn (3/22/11)
"Traders continued to focus on a series of international crises that will drive world supply and demand this year."
Benchmark West Texas Intermediate for May delivery added $1.18 at $104.27 per barrel on the New York Mercantile Exchange. In London, Brent crude gained $0.93 at $115.84 per barrel.
Energy economists continue to gauge how recent unrest in Libya, Bahrain, Yemen and Syria will affect oil production. Libya, which produces enough oil to meet nearly 2% of world demand, has almost totally stopped shipping it as rebels battle pro-Gadhafi forces. The addition of international forces, including the U.S., could mean that the country will be embroiled in a protracted conflict that will keep oil fields offline much longer than previously expected, energy experts said.
In Yemen, embattled President Ali Abdullah Saleh pledged to step down more than a year early, but his refusal to leave immediately infuriated tens of thousands of demonstrators. Yemen is an important transfer point for global oil supplies.
"Tensions are still pretty high in that entire region, so prices are going to stay above $100 per barrel for a while," PFG Best analyst Phil Flynn said.
Iraq's new oil minister said Tuesday that he expects oil to reach $120 a barrel. Iraq produces about 2.4 million barrels of oil per day.
OPIS gasoline analyst Fred Rozell said gasoline prices may continue to rise this spring to a national average of $3.75 per gallon. "With everything happening around the world, we're not going to see prices fly backward anytime soon," Rozell said.