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29 March 2024

Oil hits $110, may double soon

Published
By Agencies

London Brent oil struck $110 per barrel on Wednesday for the first time since early September 2008, driven by fears about the impact of Libyan violence on global energy supplies, analysts said.

Meanwhile, Nomura said oil prices could peak at more than $220 a barrel soon if Libya and Algeria both halted production as a result of spreading violence in the Middle East and North Africa.

Analysts compared the current situation to the 1990-91 Gulf War when prices jumped 130 per cent over seven months as Opec spare capacity was reduced to 1.8 million barrels per day.

"If Libya and Algeria were to halt oil production together, prices could peak above $220 per barrel and Opec spare capacity will be reduced to 2.1 million barrels per day, similar to levels seen during the Gulf war and when prices hit $147 a barrel in 2008," the Japanese bank said in a note.