Investors watch unrest in the Mideast and North Africa
By Virginia Harrison and Polya Lesova, MarketWatch
LONDON (MarketWatch) — Crude-oil futures slipped on Tuesday, but prices remained near 30-month highs as unrest in Libya and the Mideast continued to fuel supply fears.
Light, sweet crude for May delivery (CLK11 107.92, -0.55, -0.51%) dropped 35 cents or 0.3%, to $108.12 a barrel on the New York Mercantile Exchange.
The contract earlier hit an intraday low of $107.50 a barrel.
On Monday, May oil futures gained 0.5% to end at $108.47 a barrel, the highest settlement level since Sept. 22, 2008.
The Libyan government is prepared negotiate reforms that could include elections or a referendum, but the resignation of embattled leader Col. Moammar Gadhafi is not an option, according to media reports on Tuesday, citing a government spokesman.
The developments came amid widespread unrest across North Africa and the Mideast, including demonstrations in Algeria and Yemen, which has been supporting oil prices on the back of supply fears.
Oil prices have risen more than 18% since the beginning of the year.
Late Monday in the U.S., Federal Reserve Chairman Ben Bernanke said the recent rise in commodity prices did not present a major threat to inflation.
Bernanke told a Financial Markets conference in Atlanta that as long as inflation expectations remain stable and well anchored, “which in my view remains the case,” and as long as commodity-price increases eventually stabilize, then this will not be reflected in a standard increase in inflation. Read more on Ben Bernanke’s address.
