Oil surged to its highest price in a week in New York after the United Nations Security Council approved military intervention to protect civilians in Libya, holder of Africa’s largest crude reserves.
Futures jumped as much as 2.2 percent after the UN voted to establish a no-fly zone over Libya and demanded a cease-fire with rebels. Oil climbed 3.5 percent yesterday, the most in three weeks, after Muammar Qaddafi’s jets dropped bombs around Benghazi while Bahraini security forces arrested opposition leaders. Credit Suisse Group AG raised its forecast for Brent crude traded in London, citing Middle East unrest.
“The no-fly zone resolution increases the risk premium,” said Hannes Loacker, an analyst with Raiffeisen Bank International AG in Vienna. “Without it, Qaddafi would probably re-conquer all parts of the country and the oil business would become more stable sooner. With the resolution, oil production will face more substantial outages for a longer period.”
Crude for April delivery gained as much as $2.24 to $103.66 a barrel in electronic trading on the New York Mercantile Exchange, and was at $102.84 at 9:24 a.m. London time. Yesterday, it jumped $3.44 to $101.42, the highest close since March 10. Prices are up 1.7 percent this week and are 25 percent higher than a year ago.
Brent crude oil for May settlement climbed $1.20, or 1 percent, to $116.10 a barrel on the London-based ICE Futures Europe exchange. Yesterday, the contract advanced $4.30, or 3.9 percent, to $114.90.