Oil prices rise more than 1 per cent

NEW YORK — Oil prices rose more than one per cent on yesterday as UN-mandated airstrikes on Libya and spreading protests and unrest in the Middle East reinforced concerns about potential threats to oil supply from the region. Unrest flared again in the Middle East over the weekend, including in authoritarian Syria. In Saudi Arabia’s neighbor Yemen, a powerful general expressed support for protesters calling for an end to the president’s 32-year rule. Tension also increased between Bahrain and Iran as tit-for-tat diplomatic expulsions followed Tehran’s anger at last week’s crackdown on Shi’ites and Bahrain’s king on yesterday announced a foreign plot had been foiled.

Concerns about oil demand in Japan’s quake-hit economy were revived by reports of smoke coming out of one of the hobbled nuclear reactors and helped pull oil prices back from early peaks, brokers and analysts said. “Oil prices are still significantly higher ... Concern isn’t going to go away any time soon and little pullbacks are inevitable,” said Michael Hewson, a market analyst at CMC Markets. Brent crude futures for May delivery rose $1.32 to $115.25 a barrel by 11.38 am EDT, pulling back from an earlier $116.22 peak. US crude futures for April delivery rose $1.39 to $102.46 a barrel, off its high of $103.35. The April contract expires today. US gasoline and heating oil futures also rose more than one per cent yesterday.

Saudi Arabia eyed

Saudi Arabia has not experienced the kind of mass uprisings that have rocked the other parts of the Arab world this year, but dissent has been seen as unrest has taken root in neighboring Yemen, Bahrain and Oman. Dozens of Saudi men gathered outside the Interior Ministry in the capital Riyadh on Sunday to demand the release of jailed relatives amid a heavy police presence.

Japan’s nuclear woes

Headlines from Japan’s troubled nuclear complex revived worries about the country’s economy as unexplained smoke from two reactors indicated the crisis was not over.

“Concerns about demand in Japan were raised when smoke started coming from one of the reactors, pulling crude off the early highs. It’s negative psychology for the market,” said Phil Flynn, analyst at PFGBest Research in Chicago. 

(Reuters)