LE: Oil rises to near $105 in Europe as Gadhafi forces take back Libya oil port
Oil prices climbed back above US$105 a barrel Thursday after control of a key oil port swung back to forces loyal to Libyan leader Moammar Gadhafi, dimming hopes of a quick rebel victory and a restart of crude exports.
By early afternoon in Europe, benchmark crude for May delivery was up $1.20 at US$105.47 a barrel in electronic trading on the New York Mercantile Exchange. The contract had fallen 52 cents to settle at $104.27 on Wednesday.
In London, Brent crude was up $1.28 at US$116.41 a barrel on the ICE futures exchange.
On Wednesday, Gadhafi forces pushed rebels out of Ras Lanouf, an important oil terminal that has switched between the two sides several times since the uprising began last month. The latest rebel setback has raised speculation that coalition powers, which have bombed Libyan government forces for two weeks, may send ground troops to protect the rebellion or overthrow Gadhafi.
"The market is reacting to news from Libya that rebels have lost some ground again," said analysts at Commerzbank in Frankfurt. "An end to the fighting in Libya soon is thus not in sight and the resumption of oil shipments has moved into the far distance."
Investors will be closely watching U.S. jobs numbers from March, scheduled to be announced Friday. U.S. stock markets have rallied this week as analysts forecast the economy added about 190,000 non-farm jobs this month.
"We expect Friday's employment data to offer additional encouragement toward U.S. economic growth," Ritterbusch and Associates said in a report. "These expectations are already feeding into a strong stock market that is providing background support to the energy market."
Oil prices were also boosted by a weaker U.S. dollar, which lost ground to the euro on expectations of a rate hike by the European central bank. A falling dollar makes oil cheaper for investors trading in other currencies.
The euro rose to US$1.4212 from $1.4121, while the dollar fell to 82.81 Japanese yen from 82.89 yen.
In other Nymex trading for April contracts, heating oil rose 3.1 cents to US$3.0706 a U.S. gallon (3.78 litres) and gasoline added 1.9 cents to $3.083 a gallon. Natural gas gained 0.3 cent to $4.358 per 1,000 cubic feet.
