Oil traded near the highest in more than a week as Allied airstrikes in Libya threatened to prolong a supply disruption from Africa’s third-largest crude producer and as protests intensified in Yemen. Futures fluctuated in New York after climbing as much as 0.3 percent today as unrest escalated in Yemen where thousands spent the night on streets to maintain pressure on President Ali Abdullah Saleh, who is facing a growing internal revolt. Tension in the Middle East and North Africa is adding a risk premium of $15 to $20 a barrel to Brent oil prices, Societe Generale SA said in a report dated yesterday. “The continued upward pressure is revolving around the protests in Yemen and conflict in Libya,” said Ben Westmore, a minerals and energy economist at National Australia Bank Ltd. in Melbourne. “Japan and the Middle East continue to be the main focus of markets.” Crude for April delivery was at $102.22 barrel, down 11 cents, in electronic trading on the New York Mercantile Exchange at 2:32 p.m. Singapore time. Yesterday, it rose $1.26 to $102.33, the highest settlement since March 10. The April contract expires today. The more-actively traded May futures fell 24 cents to $102.85 a barrel. Gains have lagged behind London-traded Brent crude, with the spread between the benchmark contracts at $11.92 a barrel. Brent oil for May settlement was at $114.73, down 23 cents, after advancing as much as 0.5 percent today. It climbed $1.03, or 0.9 percent, to end the session at $114.96 a barrel on the London-based ICE Futures Europe exchange yesterday. Regional Unrest Regional turmoil has toppled the leaders of Tunisia and Egypt and reached Yemen, Bahrain and Syria. Societe Generale raised its forecast for Brent by $11 to average $109 a barrel this year as geopolitical risks increased, analysts led by Michael Wittner said in a report yesterday. Allied forces are expanding their air campaign over Libya in an effort to thwart Muammar Qaddafi’s fighters and enable rebels to control cities, such as opposition capital of Benghazi, which had been under attack by troops loyal to the regime. The Libyan leader denounced the coalition allied against him, which includes the U.S., the U.K. and France, as “the party of Satan.” Output Drops Libyan output has fallen to fewer than 400,000 barrels a day, Shokri Ghanem, chairman of Libya’s National Oil Co., said on March 19. The country produced 1.59 million barrels a day in January, according to estimates compiled by Bloomberg. Exports may be halted for “many months” because of sanctions and damage to facilities, the International Energy Agency said. Libyan oil production is likely to remain disrupted for the rest of this year, said Lawrence Eagles, head of commodities research at JPMorgan Chase & Co. in New York. Thousands of Yemenis spent the night on streets across the country to maintain pressure on President Ali Abdullah Saleh, who is facing a growing internal revolt by army leaders, ministers and diplomats. Yemen produced about 298,000 barrels of oil daily in 2009, according to BP Plc data. Military officers including Ali Muhsin al-Ahmar, commander of the first armored division, and Mohammed Ali Muhssein, commander of the eastern region, abandoned the regime yesterday. Their move was a result of the crackdown three days ago that left dozens dead, said Mohammed al-Sabri, an opposition leader. Japan’s Consumption Bahrain’s government declared a three-month state of emergency on March 15 after troops from Saudi Arabia and other Arab Gulf states arrived to help in quelling more than a month of protests. Japan is delivering more relief supplies in areas hardest hit by the March 11 earthquake as workers restored power to two reactors at a crippled Fukushima Dai-Ichi nuclear power plant yesterday, prompting Prime Minister Naoto Kan to say there was “light at the end of the tunnel.” “The recent tragic events in Japan will result in a sharp short-term drop in economic activity but is likely to be followed by a strong recovery driven by reconstruction and replacement of durables which would boost the demand for many commodities,” Societe Generale’s analysts said. Japan was responsible for 5.2 percent of global oil demand in 2009, according to BP, which publishes its Statistical Review of World Energy each June. Japan is the third-biggest crude- consuming country, after the U.S. and China. To contact the reporters on this story: Ann Koh in Singapore at akoh15@bloomberg.net; Ben Sharples in Melbourne at bsharples@bloomberg.net To contact the editor responsible for this story: Clyde Russell at crussell7@bloomberg.net

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