Oil prices rise on Libya, Middle East unrest

NEW YORK—Oil prices rose for the third straight day Wednesday amid more signs of rising demand and continued turmoil in crude exporters Libya and Yemen.

West Texas Intermediate for April delivery gained 78 cents from Tuesday to $105.75 in New York, the highest close in two years.

In London, the main Brent North Sea contract added 15 cents to $115.55.

Inventory data released Wednesday suggested that US consumption growth is steady despite rising prices.

The Department of Energy said that crude oil inventories rose by 2.1 million barrels last week, but that gasoline (petrol) stockpiles dived by 5.3 million barrels.

“The big surprise was on the products side, it still shows that there is good demand for gasoline. US consumers are willing to pay the high prices,” said Jason Schenker of Prestige Economics.

But markets also had their eyes on the conflicts across the Arab world and Japan’s disaster.

“The issues of Libya and Yemen have been driving prices of crude oil up, although Yemen is a small exporter and Libya has been more significant,” noted John Vautrain of Purvin and Gertz energy consultancy.

“The situation is probably going to last for a while,” Vautrain told AFP.

Meanwhile US energy group ConocoPhillips said Wednesday the demand for liquefied natural gas would rise after Japan’s quake disaster crippled the Fukushima Dai-ichi nuclear power plant.

“The world’s governments are starting to reconsider some of their former plans for nuclear power,” said Conoco’s chief strategist Al Hirshberg.

“I expect it is going to move up as Japan uses more LNG to replace (nuclear) power,” he said.