And they account for 42 per cent of the workforce and 40 per cent of the Emirate’s GDPNovember 24, 2015 4:32
Oil above $124 as Libya conflict hits fields, Nigeria polls postponed and in Japan aftershock
Brent hits 32-month high on Libya oil attacks; Middle East unrest adds $20-25 oil premium; Analysts warn signs of demand destruction emerging
April 8, 2011 12:24 by Reuters
Oil surged to a 32-month high of $124 on Friday as the prospect of long-term supply cuts stemming from attacks on oilfields in Libya offset demand concerns spurred by a major aftershock in Japan.
Exacerbating supply worries in the market was a report that the Norway’s North Sea Oseberg crude oil stream will load 118,000 barrels per day in May according to a trade source, significantly down from the provisional programme of 160,000 bpd in April.
By 0835 GMT Brent was up $1.63 to $124.30, a level last hit in August 2008, and U.S. crude climbed $1.20 to $111.50 after earlier touching a peak of $111.68, the highest price since September 2008.
“It looks like some of the fields in Libya are starting to be the target for military strikes which is worrisome because it means we have a risk of losing more crude for longer,” said Christophe Barret, commodities analyst at Credit Agricole.
Rebels and forces loyal to embattled leader Muammar Gaddafi exchanged bitter accusations over who had attacked oilfields and infrastructure vital to both sides.
The seven-week old civil war has cut Libya’s 1.6 million barrels per day output by 80 percent to between 250,000 and 300,000, a senior government official said.
Fellow OPEC member Nigeria postponed parliamentary elections again in some areas, heightening concerns the delays could spark violence, but polls will go ahead in most of the country on Saturday as planned.
Nigeria produces around 1.9 million bpd and its sweet, light crude is prized as an alternatives to lost Libyan supply. But production has long been vulnerable to attacks by militants which could increase if political instability takes hold.
Concerns over OPEC supplies offset demand worries exacerbated by a 7.4-magnitude earthquake that struck Japan on Thursday.
The world’s third-largest crude importer is still recovering from last month’s devastating quake and tsunami that crippled a nuclear power plant and damaged some refineries.
There were no reports of major damage to any energy infrastructure and equity markets, which dipped on news of the aftershock, opened higher on Friday.
Surging oil, along with record gold and food prices, have stoked inflationary concerns for governments worldwide due to the potential adverse impact on economic growth of the rising cost of foodstuffs and raw materials.
“Oil prices are at a point where we could begin to see demand destruction,” said Mike Wittner, head of commodities research at Societe Generale.
“It already looks like the United States may just be showing some signs of demand destruction. The United States is always the country where you see the impact the most because there are no subsidies and hardly any tax burden.”
Unrest in the Arab world has added a $20-25 premium to oil prices since the toppling of regimes in Tunisia and Egypt in the last few months, Wittner said.
(Additional reporting by Randy Fabi, editing by William Hardy)