Brent crude oil prices rose above $112 a barrel in choppy trade on Monday as investors weighed reassurances from Saudi Arabia that extra supply needs were being met against the prospect that disruption of Libya's output could be prolonged.
Saudi Aramco CEO Khalid al-Falih told reporters the extra supply needs caused by violent unrest in Libya had been made up. He could not give exact figures because it was a moving picture, Falih told reporters on the sidelines at a conference.
Foreign powers accelerated efforts to help oust Libyan leader Muammar Gaddafi as rebels fought government forces trying to take back strategic coastal cities on either side of the capital Tripoli.
Brent crude futures for April rose 40 cents to $112.54 a barrel at 11:09 a.m. EST, off its earlier $114.50 intraday peak. U.S. crude fell 10 cents to $97.78 a barrel also seeing choppy trading.
Brent's premium to its U.S. counterpart was near $15 a barrel.
Crude oil shipments from Libya were at a virtual standstill because of reduced output and bad weather, according to shipping sources.
Industry reports indicated around half of Libya's production of 1.6 million barrels per day had been cut, while other estimates had put the figure at three-quarters output shut, Fatih Birol, chief economist at the International Energy Agency told Reuters Insider TV.
Saudi Arabia's reassurances came as regional protests spread to oil-producer Oman, although oil flow had not been affected. Protesters demanding jobs and political reforms blocked roads to a main port in the north of the Gulf Arab sultanate as demonstrations spread.
Thorbjrn Bak Jensen of Global Risk Management said the situation in the Middle East and North Africa remained volatile and the outlook for prices unclear.
If Saudi Arabia starts to rumble, $120 per barrel is cheap. If not, and (Muammar) Gaddafi leaves and peace and quiet spread in the involved countries, $120 is expensive, he said.