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VOL. 35 | NO. 7 | Friday, February 18, 2011




Oil stays below $100 after rising above $103

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NEW YORK (AP) — Oil prices rose again Thursday as the rebellion in Libya appeared to have shut down even more oil production than previously estimated.

Italy's Eni, the largest oil producer in Libya, said the violent uprising has taken 1.2 million barrels per day off the market. Previous estimates said about 1 million barrels were offline since protests began. Most of that oil is exported to Europe, but it will push prices up everywhere by increasing competition for similar varieties of higher-quality crude used to make gasoline and jet fuel.

Benchmark West Texas Intermediate crude added $1.24 at $99.34 a barrel in morning trading on the New York Mercantile Exchange. Prices have jumped 18 percent since Friday. In London, Brent crude added $2.19 at $113.44 on the ICE Futures exchange.

Oil prices are climbing even though the world's largest oil consumer, the U.S., has large supplies of both oil and gasoline. The Energy Information Administration is expected to report later Thursday that oil supplies in the U.S. grew last week by 1.4 million barrels and gasoline supplies added 950,000 barrels, according to Platts, the energy information arm of McGraw-Hill Cos.

"It doesn't matter what the supply is here," analyst and trader Stephen Schork said. "America is in competition with Europe and Asia and everywhere else for oil. And when there's a shortage somewhere, it pushes prices everywhere else."

With no clear outcome in sight, Schork said the violence in Libya has put a "fear premium" of about $15 to $20 per barrel on oil prices. That premium is currently flowing through energy markets, pushing gasoline prices to the highest levels ever for this time of year.

In other Nymex trading in March contracts, heating oil rose 3 cents to $2.9429 per gallon and gasoline added 4 cents at $2.9090 per gallon. Natural gas lost 8 cents at $3.855 per 1,000 cubic feet.

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