RTRS: Oil prices climb as Libya unrest stokes concern
(Reuters) - Oil prices climbed on Wednesday as turmoil in Libya fuelled fears that unrest could spread to other oil-producing nations and choke supplies.
Brent crude futures climbed $2.91 to $108.68 a barrel by 1415 GMT.
Futures on U.S. light crude, also known as WTI, were $1.06 firmer at $96.48 a barrel at the same time, the highest level since October 2008.
Prices gained support as Austria's OMV said on Wednesday it might be heading for a full production shutdown in Libya; adding to earlier comments by Total, Repsol, Eni and BASF that they were either slowing or stopping output.
"If we lose Libyan production, then you will have to replace around 1.6 million barrels per day of very good quality crude, which would introduce logistical implications and have a cost," Credit Agricole CIB analyst Christophe Barret said.
The disruption in Libya, which pumps 1.6 million barrels per day (bpd) or nearly 2 percent of global supply, marks the first cut in oil supplies related to the recent wave of protests in North Africa and the Middle East.
"People are scared to lose a producer that pumps very good quality crude. Companies are cutting production at the fields and there are difficulties at the port, so products trade is also disrupted," he added.
The disruption could push up Brent to a greater extent because of its tighter availability and geographical proximity to the unrest, Commerzbank analysts said.
Governments across the world moved to send planes and ships to evacuate citizens from Libya, whose leader Muammar Gaddafi has vowed to crush a revolt against his 41-year rule.
Between 300,000-400,000 barrels per day (bpd) of Libyan output has been shut down, according to Reuters calculations, while Barclays analyst Amrita Sen said in a note that around 1 million bpd of Libyan crude oil production is likely to have been shut in.
Focus was also on top exporter Saudi Arabia, where ruling King Abdullah unveiled a package of benefits worth billions of riyals to mark his return on Wednesday after months of medical treatment abroad.
Jittery investors are worried about further supply disruption if protests spread in the country, which supplies around 10 percent of the world's oil and holds most of the world's spare capacity. On Tuesday, Saudi stopped short of pumping more oil to calm markets, saying prices were driven by fear.
OIL SUPPLIES EYED, U.S. STOCKS AWAITED
While protests in Saudi Arabia have so far been low key, Shi'ites in neighbouring Bahrain are demonstrating against the Sunni-led government, fanning worries this could spill over to the Shi'ite minority in Saudi's oil-producing eastern province.
