Conflict Continues Libya Oil Prices Lift

NEW YORK, - Battle in Libya increasing, including the bombing of key oil infrastructure, sending oil prices again rose in London on Wednesday, but a rise in U.S. crude oil stocks weighed on oil prices fell slightly in New York.

New York's reference crude oil West Texas Intermediate (WTI) for April delivery dropped 64 cents per barrel to U.S. $ 104.38, while London's Brent North Sea surged 2.56 dollars to 115.62 U.S. dollars.

In early trading news driven market worsening fighting in Libya, which saw oil wells and processing infrastructure at Ras Lanuf bombed the rebel-occupied by troops loyal to strongman Moamer Kadhafi.

Even the head of Libya's National Oil Corporation Shukri Ghanem said the national oil production has fallen by more than two-thirds, from 1.6 million barrels per day to just 500,000, a reduction of supply difficult to replace the light crude oil destined for refineries refinery in Europe.

A JPMorgan report said Wednesday that for now, European stocks adequate. However, he added, "With approximately 70-80 percent of Libyan crude oil exports flowing to Europe, there is a need to replace approximately 500-800000 barrels per day of light sweet crude."

"It does not take too many days of termination of employment to attract stock of 20 million barrels that will be taken (European buyers) out of the comfort zone." At the same time, U.S. crude oil stocks continued to increase the main depot Cushing, Oklahoma, according to the latest weekly report on energy department (DoE).

U.S. crude oil inventories rose a larger-than-expected 2.5 million barrels in the week ended March 4, the DoE report said Wednesday. "That could mean a further widening the gap between London and New York prices," said Nic Brown from Natixis.

If current levels continue to pile up in the U.S., "there may be substantial difficulties with shipments of crude oil at the next light crude oil contract expiration," he said.

DoE on Wednesday to give the impression there would be no penyurutan global demand in the near future, increasing the demand projection for 2011 by 4.6 percent in his monthly outlook report.

He said it expected the average WTI price of 105 dollars a barrel this year, up 14 dollars a month earlier than expected, because of turmoil in the Middle East and North Africa.