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 fixed4.08%4.12%
15 yr fixed3.23%3.21%
5/1 ARM3.46%3.30%
30 yr refi4.14%4.12%
15 yr refi3.28%3.21%
Rate data provided
by Bankrate.com
View rates in your area
 
Find personalized rates:
Index Last Change % Change
Dow 16,804.71 -238.19 -1.40%
Nasdaq 4,422.09 -71.30 -1.59%
S&P 500 1,946.16 -26.13 -1.32%
Treasuries 2.40 -0.10 -4.19%
Data as of 10:42pm ET
Company Price Change % Change
Bank of America Corp... 16.82 -0.23 -1.35%
Ford Motor Co 14.59 -0.20 -1.35%
Facebook Inc 76.55 -2.49 -3.15%
Apple Inc 99.18 -1.57 -1.56%
Cisco Systems Inc 25.03 -0.14 -0.56%
Data as of 4:03pm ET

Sections

In the last five years, pumpkin sales have risen 34% as people demand pumpkin in everything from beer to beef jerky. More

Facebook's chief product officer issued an apology to Sister Roma and the drag community on Wednesday for its flawed 'real name' policy. More

New York City launches a comprehensive site for all things related to its digital tech scene, Digital.NYC. More

For these seniors, the best retirement is not to retire. From a 102-year-old Wal-Mart worker to an activist park ranger, these workers have stayed on the job well into their golden years. More

Market indexes are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer Morningstar: © 2014 Morningstar, Inc. All Rights Reserved. Disclaimer The Dow Jones IndexesSM are proprietary to and distributed by Dow Jones & Company, Inc. and have been licensed for use. All content of the Dow Jones IndexesSM © 2014 is proprietary to Dow Jones & Company, Inc. Chicago Mercantile Association. The market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. FactSet Research Systems Inc. 2014. All rights reserved. Most stock quote data provided by BATS.