Oil climbed as allied air strikes in Libya threatened to prolong a supply outage in North Africa’s third-biggest producer and renewed concern escalating turmoil may disrupt Middle East exports.
Futures advanced as much as 2.3 percent after Muammar Qaddafi vowed to repel attacks by missiles and warplanes against military installations. Libya’s crude output has fallen to a quarter of the production before the crisis and may stop, according to the chairman of the national oil company. Bahrain Petroleum Co. employees went on strike last week in response to a police crackdown on anti-government demonstrations, while Yemen declared a state of emergency.
“The likelihood of a swift normalization of Libya crude oil production looks less and less likely after events over the weekend,” Soozhana Choi, head of Asian commodities research at Deutsche Bank AG in Singapore, said in an interview with Rishaad Salamat on Bloomberg Television’s “On the Move Asia.”
Crude for April delivery climbed as much as $2.28 to $103.35 a barrel in electronic trading on the New York Mercantile Exchange. It was at $102.67 at 4:11 p.m. Singapore time. The contract, which expires tomorrow, last week declined 0.1 percent to $101.07.
The more-actively traded May futures rose as much as $2.42 to $104.27 a barrel. Gains have lagged behind London-traded Brent crude, widening the spread between the benchmark contracts to $11.85 from $11.53 a week ago.