Business

Oil price hits 30-month high on new supply fears

Libyan rebels firing
Image caption Oil traders believe that the Libya crisis could turn into a lengthy stand-off between the two side

Oil prices jumped to their highest close in two-and-a-half years as Libya's conflict and Middle East unrest sparked fresh worries about supplies.

Brent crude for delivery in May rose $2.23 to $117.36 a barrel, its highest close since August 2008 and up 23.9% so far this year.

US crude rose $2.45 to $106.72, its highest close since September 2008, and jumping 16.8% for the quarter.

Analysts said oil trading recently was the most volatile for two years.

Fighting near Libya's oil ports heightened concerns about the country's ability to re-start production any time soon.

Energy consultants Cameron Hanover said traders are beginning to view the Libya uprising as a stand-off with little sign of resolution.

"Optimism that Libyan oil might return to the market, seen earlier this week, was dashed," the firm said in a statement.

But the oil price also rose amid optimism about the strength of the US economy, which could mean crude imports rising.

Brent crude's recovery comes after it fell below $108 in the aftermath of Japan's earthquake and tsunami on 11 March.