Brent oil tops $120 a barrel on Libya unrest

NEW YORK—Oil prices surged to new heights Monday, with Brent crude topping $120 a barrel for the first time since August 22, 2008, as traders eyed a raging rebellion in oil-exporter Libya.

New York’s main contract, light sweet crude for delivery in May, closed at $108.47 a barrel, a gain of 53 cents from Friday.

In London, Brent North Sea crude for May delivery leaped $2.36 to settle at $121.06, after topping at $121.29 just before the session close.

The market kept a focus on fighting that continued Monday in Libya between rebels and forces loyal to leader Moammar Gadhafi.

Rebel fighters made a new attempt to recapture Brega, advancing to the outskirts of the oil refinery town only to be forced back under artillery fire.

Before the crisis, Libya exported 1.3 million barrels a day of crude oil, more than 1.5 percent of global demand, in large part to Europe. Those exports have dwindled to a trickle amid the uprising.

That makes Brent crude futures, the European benchmark contract, more sensitive to the situation in Libya than the US market, where crude oil reserves are abundant.

“The longer these battles are going on, the more the market is realizing the supply is going to be offline,” said Matt Smith of Summit Energy.

Unrest in other parts of the Arab world also contributed to the rise in oil prices, he said.

“Yemen is such a big threat at the moment because of the proximity” with Saudi Arabia, the biggest oil producer in the OPEC cartel, he said.

“Things in Bahrain have calmed down a little bit but any further unrest could press prices higher.”

In Gabon, sub-Saharan Africa’s fourth-largest oil producer, a strike by oil-sector employees had halted almost all oil production.

Gabon’s oil daily output normally ranges from 220,000 to 240,000 barrels.

“It is not a lot of oil but given the current situation we can’t afford any more outages, so all the barrels are important,” Kilduff said.