Business

Crude oil costs rise in Asia as Libyan unrest continues

Rebel wrapped up in machine gun ammunition on the road from Ras Lanuf, Libya
Image caption Rebels have been on the back foot defending the oil terminal town of Ras Lanuf against Colonel Gaddafi

Crude oil prices rose sharply during Asian trading hours on fears about the unrest in Libya, before falling back.

Brent crude peaked at $116.50 a barrel, near its two-and-a-half year high, before dropping to $115.60 by 0830 GMT. US light, sweet crude was at $104.25.

The latest price rises followed reported air strikes at an oil terminal near the rebel-held town of Ras Lanuf.

Ras Lanuf has been coming under heavy bombardment from pro-Gaddafi forces in recent days.

Opec meeting?

Libyan oil exports go predominately to the European market - for which Brent is the leading price benchmark.

Markets continue to watch the Organization of Petroleum Exporting Countries (Opec) for any sign of an increase in output to offset the losses in capacity caused by events in Libya.

Earlier this week, the cartel of oil producers had been informally discussing whether an emergency meeting to discuss output levels was required.

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In the US, the Energy Information Agency revealed that US crude stockpiles were much higher than anticipated, helping ease some of the concerns.

However, that was not enough to lift stock markets with the main market indexes in Tokyo, Sydney and Shanghai all ending 1.5% lower on Thursday.

European markets followed suit, falling by about 1% in early trading.

Nato talks

Meanwhile, there have been calls within the international community for the implementation of a no-fly zone over Libyan airspace.

However, Libyan leader Colonel Muammar Gaddafi has said his people "will fight" any such action.

Nato defence ministers are expected to meet in Brussels to discuss options for dealing with the situation in Libya on Thursday.

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