NewsCrude hovers above $98 on concerns over Libya cutting supply
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AnalysisCrude traded above $98 per barrel today as traders fear that Libya may cut crude supplies as political turmoil in the region continues, while it is speculated that the US economic recovery will boost demand on oil.

Crude today hovers around $98 per barrel recording its highest around $99.17 and lowest around $96.38, while it currently is trading around $98.14 per barrel.

Oil is headed for its largest weekly gain in two years following the violent developments in Libya, forcing oil companies to idle production to around 750 to 500 thousand barrels per day making up less than 1% of daily crude global consumption. Meanwhile, on the political front Libyan Leader Muammar Gaddafi in his third speech blamed Osama Bin Laden and drugs for the uprising, while loyal militiamen attacked two cities near Tripoli killing at least 17 people; rebels also advanced by seizing a military air base.

Crude yesterday traded around $96 per barrel recording its highest around $103.31 and lowest around $95.62 per barrel, closing around $96.79 per barrel. Futures soared yesterday due to fears overwhelming investors in the Middle East, specifically since the Libyan government is cracking down on protestors leading several oil companies like Eni and Repsol, YPF, BP and French oil giant Total to temporarily suspend production. Libya holds the largest oil reserve in Africa producing over 1.6 million barrels per day, and one of largest oil contributors in the world.

Moreover, the US Energy Department yesterday released the EIA report showing a rise in supplies by 822 thousand barrels to 346.7 million this week, lower than forecasts of 1.1 MB.

The Organization of Petroleum Exporting Countries (OPEC) stated that it will not wait for an emergency meeting in order to increase output since it is prepared to meet any shortage, although any shortfall from Libya could present major upside risks to crude prices, leading to a drop in supplies from other oil producing countries as production increases to cover demand.

As for NYMEX as of 04:27 EST; motor gasoline rose $0.95 recording $274.260 per gallon; heating is trading around $290.110 per gallon inclining $0.83; whereas natural gasoline shed $0.46 to record $3.854. In London, Brent futures gained $1.16 to record $112.650.