US oil price tops key $110 barrier

NEW YORK—US oil prices hit their highest level since September 2008 Thursday as the IMF warned that demand is outpacing the growth of global supplies.

The New York benchmark West Texas Intermediate crude for May delivery closed at $110.30 a barrel, up $1.47 from Wednesday, after hitting an intraday high of $110.44 a barrel.

In London, Brent North Sea crude for May delivery picked up 37 cents to $122.67, still below its Wednesday high of $123.37 — its best level since early August 2008.

“$110 was a very important technical level,” said oil analyst John Kilduff of Again Capital.

“That’s the number we’ve all been watching, not because it is a round number.”

“It was the big action in 2008, the level that prices took off to the $147 level. And after they fell from there, it proved to be some support.”

Kilduff also pointed to the ongoing rebellion in Libya “grinding to a standstill” that suggested Libya’s valued light crude would remain off the market for longer than originally anticipated.

On Wednesday a Greek-owned tanker carrying $100-million worth of crude left a terminal in rebel-held territory near Tobruk.

The cargo was the first consignment of oil to leave Libya since UN-backed air strikes began on March 19 against strongman Moammar Gadhafi’s crackdown on the rebels.

But there was no sign how much that could be sustained.

Meanwhile the International Monetary Fund warned that oil supply growth was slowing while demand was accelerating, pointing to sustained higher prices over the long term.

“The persistent increase in oil prices over the past decade suggests that global oil markets have entered a period of increased scarcity,” the IMF said in a report on the global economy.

“If the tension intensifies, whether from stronger demand, traditional supply disruptions, or setbacks to capacity growth, market clearing could force price spikes, as in 2007-2008.”

“After stagnating in recent years, oil supply will not return to the growth trends of the 1980s and 1990s,” Thomas Helbling, the report’s lead author, told reporters.