Oil prices moved up closer to US$106 a barrel Friday as political upheaval in the Middle East and Libya and signs of strong global demand kept crude near two-year highs.
By early afternoon in Europe, benchmark crude for May delivery was up 17 cents to US$105.77 a barrel in electronic trading on the New York Mercantile Exchange. The contract fell 15 cents to settle at US$105.60 on Thursday.
In London, Brent crude was up three cents at $115.75 a barrel on the ICE futures exchange.
Crude prices have jumped 25 per cent since protests against Libyan leader Moammar Gadhafi that began in mid-February escalated into a rebellion and shut down most of the OPEC member's 1.6 million barrels per day of crude output.
Fighter jets from a coalition of nations, including the United States, Canada and their NATO allies, have pounded Gadhafi's forces this week but rebels have so far been unable to mount an offensive to overthrow the regime.
Investors are also closely watching escalating protests in Syria and a power struggle in Yemen, the latest unrest in a wave of uprisings this year that unseated leaders from power in Tunisia and Egypt and sparked violent demonstrations throughout North Africa and the Middle East.
Market attention also turned to Bahrain, where at least 20 people have been killed in recent weeks as Bahrain's rulers attempt to crush the monthlong uprising in the tiny island kingdom.
"While supply losses in Libya can currently still be easily compensated by other OPEC members given the spare capacities, this might no longer be the case if the crisis were to heighten in Bahrain," said analysts at Commerzbank in Frankfurt. "Consequently, the market is likely to watch further events there with some nervousness."
Recent signs of strong crude demand in the U.S. and China have helped push prices higher. Chinese oil demand rose 10 per cent in February from a year earlier and U.S
