Isra-Mart srl : Oil prices move towards $124 a barrel after Libyan oil field attacks

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Isra-Mart srl news:

Oil prices are closing in on $124 a barrel this morning, on the back of fears that a series of skirmishes at Libya's largest oil field will further restruct supply.

Brent crude rose around one per cent to hit $123.95 today, while US crude shot up by almost a dollar to $111.28, its highest level since the summer of 2008.
The vast majority of Libya's 1.6 million barrels a day production capacity is already suspended due to the fighting.

However, the latest attacks hit the Sarir and Messla fields, both of which are in the Sirte Basin, a region that contains around 80 per cent of Libya's proven reserves.

The rebel controlled Arabian Gulf Oil Company (Agoco) in the east of Libya this week sold the first oil from the country in three weeks, but analysts do not foresee production returning to previous levels for some time.

The International Monetary Fund (IMF) yesterday warned that prices could climb even higher as demand from the growing economies of China, India and Brazil puts further pressure on supply bottlenecks.

On a trip to Saudi Arabia earlier this week, British Energy and Climate Change Secretary Chris Huhne insisted there was no shortage of oil and that the recent spike in prices was driven by fears over continued unrest rather than an actual constriction of supply.

However, the latest intensification of fighting in Libya combined with ongoing fears that unrest could spread to other oil producers in the region is likely to further increase upward pressure on prices.

The surge in oil prices since the start of the Tunisian uprising earlier this year has led to repeated calls from green groups and political leaders for businesses to step up investment in fuel efficiency and clean technology in order to better insulate themselves against increasingly volatile oil prices.