Oil - near $106 and rising

The price of crude was back above $106 on Thursday.Click chart to track commodity prices. By Charles Riley, staff reporter


NEW YORK (CNNMoney) -- Crude oil prices moved above $106 a barrel again Thursday before retreating, as a confluence of war, natural disasters and Japan's nuclear problems unnerved investors.

The benchmark U.S. contract, West Texas Intermediate, dropped 15 cents, or 0.55%, to settle at $105.60 a barrel for May delivery. In early trading, the price peaked at $106.69.

Brent crude, pegged to oil prices in the North Sea, rose 4 cents to $115.59.

U.S. oil prices have surged more than 20% since mid-February, when pro-democracy movements reached Libya, Africa's third-largest oil producer.

Libya is just the start of the worries. A bomb exploded on a Jerusalem bus Wednesday. Escalating violence between Syrian security forces and anti-government protesters left 15 dead. The governments of Bahrain, Tunisia, Yemen and Egypt are all in various stages of disarray. Portugal's debt crisis continues unabated.

"The truth is we have very strong fundamental justification for where the price of oil is at and where it is probably going," Phil Flynn, senior market analyst at PFG Best, wrote in a research note.

Prices could be going much higher.

If all oil production ceased in Libya, Bahrain and Yemen, oil prices could rise to $125 a barrel, according to Moody's Analytics economist Chris Lafakis. If Iran reduced production by 50%, prices could rise to $150.

One mitigating factor is the reduced demand in Japan after the twin natural disasters that rocked the country earlier this month.

With business shuttered and manufacturing plants closed, the country is using less oil. For the moment, that's actually a helpful phenomenon for world oil markets struggling with reduced exports from Libya.

For Japan, the temporary drop in demand coincides with a diminished refining capacity. The earthquake and tsunami damaged a number of Japanese oil refineries, sparking concerns about whether Japan would need to import refined products.

But the refineries are starting to open. ExxonMobil (XOM, Fortune 500) said Wednesday that it had restarted all of its Japanese refineries for the first time since the March 11 quake.

Three of the four refineries operated by Cosmo Oil are online, and ramping up production. However, the company's largest refinery, located north of Tokyo in Chiba, is still offline.

In the longer term, experts expect Japanese demand for oil to spike as the country starts reconstruction efforts, especially with a nuclear capacity reduced by the quake damage at the Fukushima plant. To top of page

Frontline troops push for solar energy
The U.S. Marines are testing renewable energy technologies like solar to reduce costs and casualties associated with fossil fuels. Play
25 Best Places to find rich singles
Looking for Mr. or Ms. Moneybags? Hunt down the perfect mate in these wealthy cities, which are brimming with unattached professionals. More
Fun festivals: Twins to mustard to pirates!
You'll see double in Twinsburg, Ohio, and Ketchup lovers should beware in Middleton, WI. Here's some of the best and strangest town festivals. Play
Overnight Avg Rate Latest Change Last Week
30 yr fixed3.94%3.88%
15 yr fixed3.02%3.05%
5/1 ARM3.48%3.50%
30 yr refi4.01%3.93%
15 yr refi3.10%3.14%
Rate data provided
by Bankrate.com
View rates in your area
 
Find personalized rates:
Index Last Change % Change
Dow 18,214.42 -10.15 -0.06%
Nasdaq 4,987.89 20.75 0.42%
S&P 500 2,110.74 -3.12 -0.15%
Treasuries 2.02 0.05 2.39%
Data as of 7:08am ET
Company Price Change % Change
Bank of America Corp... 16.04 0.00 0.00%
Apple Inc 130.42 1.62 1.26%
Chesapeake Energy Co... 17.20 -0.78 -4.34%
General Electric Co 25.89 -0.02 -0.08%
Hewlett-Packard Co 34.01 -0.66 -1.90%
Data as of Feb 26

Sections

The government of Prime Minister Narendra Modi is set to reveal its second budget, an event so highly anticipated that TV news channels have doubled their advertising rates around Saturday's presentation. More

The new FCC net neutrality rules are here. Now Comcast is threatening lawsuits and warning it'll stop investing in its own network. More

Shu-Ling Garver, once a homeless child in Shanghai, rose to one of the top engineers at Intel. Now her entrepreneurial mission is to get kids excited about engineering. More

Glassdoor recently published its annual list of the highest-rated companies for interns. More