By Claudia Assis and Virginia Harrison, MarketWatch
SAN FRANCISCO (MarketWatch) — Crude-oil futures edged higher Monday as tensions in key oil-exporting countries kept investors worried about supply constraints. Prices earlier spiked to the highest levels in 30 months.
Light, sweet crude for May delivery (CLK11 107.92, -0.02, -0.02%) added 13 cents, or 0.1%, to $108.07 a barrel on the New York Mercantile Exchange. A close around these levels would be oil's highest settlement since late September 2008.
Yemenis protest despite appeal
Despite a call by President Ali Abdullah Saleh for demonstrations and sit-ins to end, protesters show no sign of going home.
Oil earlier traded as high as $108.78 a barrel, its highest intraday level since Sept. 20, 2008, when the then front-month contract traded as high as $109.50 a barrel.
Oil lost steam as floor trading began, wavering between small gains and losses as unrest in the Middle East and North Africa provided support, but the higher prices spooked some investors.
Although investors remain worried about geopolitics, nothing "was dramatically new over the weekend so we're in something of a mixed bag," said Bill O'Neill, a principal at Logic Advisors in New Jersey.
But as the situation in Libya and elsewhere in the Middle East and North Africa shows no signs of a speedy resolution, prices could hit $110 in short order and $120 by the end of the year, if not sooner, O'Neill added.
Oil prices have risen more than 18% so far this year.
With conflict in Libya in its sixth week, Col. Moammar Gadhafi's government rejected a cease-fire offer from the rebel council. The opposition retook the key oil town of Brega. Turkey announced possible talks between the two sides in Ankara.
Demonstrations and strikes in Algeria fueled concerns, and Nigeria announced it would postpone its elections by a week.
"Developments in Nigeria and Algeria must be monitored closely because they are both major oil and (liquefied natural gas) producers. Disruptions to their oil production would further impact Brent crude due to proximity and quality similarities. Additionally, LNG markets have already tightened due to the Japanese tragedy," analysts at J. P. Morgan said in a note to clients Monday.
Brent for May delivery added $1.51, or 1.3%, to $120.28 a barrel on the ICE Futures Exchange in London.
In Yemen, there were fresh clashes between protestors and riot police in Yemen.
In Bahrain, the Associated Press reported that officials have effectively shut down the opposition's leading newspaper, Al-Wasat, as part of a larger government crackdown on the media. Read more about the unrest in the Middle East region
Other energy products tracked oil higher, with gasoline for May delivery (CLK11 107.92, -0.02, -0.02%) up a penny to $3.16 a gallon.
Natural-gas futures traded lower, however, with the May contract (NGK11 4.31, -0.06, -1.28%) down 5 cents, or 1.3%, to $4.30 per million British thermal units.
Claudia Assis is a San Francisco-based reporter for MarketWatch. Virginia Harrison is a MarketWatch reporter based in Sydney.
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