Our Terms of Service and Privacy Policy have changed.

By continuing to use this site, you are agreeing to the new Privacy Policy and Terms of Service.

Oil jumps above $103 as Libya crisis escalates

oilClick chart for other commodity prices By Catherine Tymkiw, markets editor


NEW YORK (CNNMoney) -- Oil prices surged in electronic trading Monday after coalition forces launched an attack on Libyan military targets over the weekend.

The benchmark U.S. contract, West Texas Intermediate, gained as much as $2.28 to top $103 a barrel for April delivery. It later dropped back to settle $1.26 higher at $102.33 a barrel. The more active May contract jumped $1.24 to settle at $103.09 a barrel. It briefly topped $104 in earlier trading.

Oil gains came as forces from a coalition that includes the United States launched air attacks on Libyan defense systems starting Saturday. Those airstrikes intensified on Sunday,striking Libyan leader Moammar Gadhafi's compound.

"There's significant upside risk to the oil market," said Phil Flynn, senior market analyst with PFG Best. "Lets face it, the situation in Libya is still in flux. And the entire region is in flux as well."

Oil is still below the $106.95-a-barrel high hit two weeks ago, after it fell following Japan's earthquake and subsequent nuclear crisis. Fears about a meltdown at the Fukushima nuclear power plant have calmed after engineers made progress in cooling the reactors over the weekend.

Meanwhile, Brent crude, the main European contract, rose 23 cents to $113.53 a barrel.

While Libya is Africa's third-largest oil producer and sits atop the continent's largest reserves, the country only contributes about 2% of the 87.5 million barrels of oil the world consumes every day.

Earlier this month, the International Energy Agency estimated roughly 1 million barrels per day of Libyan oil had been taken off the world market so far.

Saudi Arabia and other members of the Organization of the Petroleum Exporting Countries have pledged to increase production to make up for any lost oil due to unrest in Libya.

But concerns are less about Libyan production and more about how far the problems will spread.

"The market realizes that the concerns in Libya go beyond Libya, and even if the Libyan situation were solved today, we would still have to deal with other countries in the region that are still red hot," Flynn said.

Traders are worried about growing conflict in the Middle East, following protests in Yemen, Bahrain and Oman.

So far this month, oil prices are averaging just over $101 a barrel. In March 2010, prices averaged just over $81 a barrel for the entire month. To top of page

Overnight Avg Rate Latest Change Last Week
30 yr fixed4.09%4.03%
15 yr fixed3.25%3.18%
5/1 ARM3.42%3.29%
30 yr refi4.12%4.07%
15 yr refi3.29%3.19%
Rate data provided
by Bankrate.com
View rates in your area
 
Find personalized rates:
Index Last Change % Change
Dow 19,772.18 -55.07 -0.28%
Nasdaq 5,542.91 -12.42 -0.22%
S&P 500 2,261.73 -9.58 -0.42%
Treasuries 2.40 -0.07 -2.68%
Data as of 2:25pm ET
Company Price Change % Change
Qualcomm Inc 55.56 -7.32 -11.64%
Bank of America Corp... 22.54 -0.09 -0.42%
General Electric Co 29.70 -0.84 -2.74%
Chesapeake Energy Co... 6.61 -0.08 -1.20%
Ford Motor Co 12.28 -0.08 -0.65%
Data as of 2:10pm ET

Sections

A group of Democratic lawmakers is calling on a government agency to determine whether President Donald Trump has violated a term of the lease for his hotel in Washington, D.C. More

Conservative Mick Mulvaney has taken both Democrats and Republicans to task for being fiscally profligate. Here's a look at where he may clash with Trump on the key budget issues he'd oversee if confirmed as White House budget director. More

Sprint is buying 33% of Jay Z's Tidal in a partnership that will give the carrier's customers access to the app's exclusive music content. More

Americans tend to be poor savers. If you're one of them, this rule can help you break that bad habit for good. More