By Virginia Harrison, MarketWatch
SYDNEY (MarketWatch) — Crude oil futures gained in electronic trading Monday as the conflict in Libya escalated, with international coalition forces conducting air strikes over the country while its embattled leader Col. Moammar Gadhafi vowed to wage a “long war.”
The air attacks came after the United Nations Security Council authorized all necessary measures, including a no-fly zone over Libya by resolution on Friday.
Light, sweet crude for April delivery (CLJ11 102.95, +1.88, +1.86%) advanced $1.82 or 1.8%, or 0.4%, to $102.89 a barrel on Globex.
“Oil prices are likely to remain elevated while the situation in the Middle East and North Africa remains volatile. The key remains Saudi Arabia, where the news has at least not been any worse over the past week,” analysts at the National Australian Bank said in a note Monday.
There were reports that pro-democracy protests spread to Syria on the weekend, where clashes with government forces led to several deaths. Read more about the Libyan & surrounding conflicts.
While the focus was firmly on developments in North Africa and the Middle East on Monday, efforts to contain the nuclear disaster in Japan continued.
There were some signs of stabilization at the Fukushima Daichi nuclear power on Monday, with news that temperatures at the six spent fuel storage pools plant had been reduced to below boiling point, according to media reports.
The post-quake reconstruction in Japan may have an impact on crude prices, as the rebuilding efforts are expected to increase oil demand given the extent of infrastructure damage, according to analysts at Nomura.
