Oil price rise forecast as fears increase over supply problems
CRUDE oil climbed the most in three weeks, on concerns that unrest in North Africa and the Middle East will spread, reducing shipments from the region.
Oil rose as much as 3.1pc after the US signalled it favoured allowing foreign intervention against Libyan leader Muammar Gaddafi's forces. Bahrain declared a three-month state of emergency on Tuesday.
UBS raised its 2011 Brent crude forecast because of the turmoil. "The situation in Japan has calmed down enough that attention has returned to the problems in North Africa and the Middle East," said Stephen Schork, president of the Schork Group in Villanova, Pennsylvania. "Gaddafi's forces are on the offensive in Libya, the Saudis are in Bahrain to quell a Shi'ite uprising, and the trouble may spread further."
Crude oil for April delivery rose $2.93, or 3pc, to $100.91 a barrel on the New York Mercantile Exchange. Futures are heading for the biggest gain since February 23.
The contract is up 22pc from a year ago.
Brent crude oil for May settlement advanced $3.56 or 3.2pc, to $114.18 a barrel on the London-based ICE Futures Europe exchange. UBS raised its Brent crude projection to $103.75 a barrel from $85. (Bloomberg)