This Article is From Oct 29, 2011

Oil prices jump on airstrikes in Libya

Oil prices jump on airstrikes in Libya

Oil prices jumped more than $2 a barrel on Monday as the Western military action in Libya and continuing unrest in a host of other countries in the oil-rich Middle East region raised fears of possible disruptions to crude supplies.

The price for crude oil has risen continuously since expectations of a solid economic recovery in the United States solidified last year, and oil prices have soared sharply in recent months after anti-government protests erupted in northern Africa and the Middle East earlier this year.

On Monday, Brent crude for May settlement soared as much as $2.29, or 2 percent, to $116.22 a barrel on the London-based ICE Futures Europe exchange and was last trading at $115.74. U.S. crude futures for April rose as much as $2.18 to $103.25 and last traded at $102.69.

The jumps nudged the price of oil back toward the highest levels since September 2008, reached earlier this month.

Gold, whose status as a safer investment causes it to rise amid times of uncertainty, also rose sharply, to around $1,438 per ounce. Earlier this month, gold had soared to an all-time high of $1,444.

A summit meeting in Paris had set the stage for Western military action in Libya over the weekend, and American and European military forces intensified their barrage of Col. Muammar el-Qaddafi’s forces by air and sea on Sunday.

The stock markets in the Asia-Pacific region shrugged off the higher oil prices on Monday, with most indexes rising, except for Japan, which was closed for a national holiday.

The Hang Seng in Hong Kong traded 1.1 percent higher by late morning and the Taiex in Taiwan was up 0.7 percent. In Singapore, the Straits Times rose 0.9 percent, and the Kospi in South Korea gained 0.8 percent.

In mainland China, where the authorities announced on Friday yet another step to rein in lending by raising banks’ reserve requirement ratios, the Shanghai composite index fell 0.1 percent.

The holiday in Japan is allowing investors some time to digest the impact of the devastating quake that struck on March 11 and the crisis at the Fukushima Daiichi nuclear power station.

Despite progress on cooling some of the plant’s reactors, the situation at the other reactors remains worrisome. At the same time, signs of radioactive contamination in some agricultural products have emerged.