Oil holds above $100 a barrel

NEW YORK (CNNMoney) — Oil prices held above $100 a barrel early Thursday, as the political upheaval in Libya has curtailed production from the North African country.

The U.S. benchmark oil contract — West Texas Intermediate — for April delivery was up $2.63, or 2.6%, to $100.70 a barrel.

Brent crude — the European standard — rose $3.93, or 3.5%, to $115.18 a barrel.

“The energy market continues its upside momentum … supported by the geopolitical unrest across the Middle East-North Africa (MENA) area,” said Myrto Sokou, an analyst at Sucden Financial, in a report.

“We cannot say yet that we have entered a new era above $100 for the oil market, but the recent uncertain geopolitical conditions in the MENA definitely provide potential for even higher crude oil prices toward $120 per barrel level,” the report states.

Oil prices have been propelled to the highest levels in more than two years this week, as the unrest spreading across the Arab world engulfed a significant oil exporting country for the first time.

Oil prices rose above $100 a barrel Wednesday for the first time since October 2008, before retreating to end its active trading session at $98.10 a barrel.

While Libya is Africa’s third-largest oil producer and sits atop the continent’s largest reserves, the country only contributes about 2% of the 87.5 million barrels of oil the world consumers every day.

As the unrest entered its 10th day, opponents of Libyan leader Moammar Gadhafi have taken control of the country’s second and third-largest cities. But Libya’s capital, Tripoli, remains tense following violent protests that have left hundreds dead, according to estimates.

“Traders were concerned about events in Libya, which seem to have gone from bad to worse,” stated analysts at Cameron Hanover, a firm that specializes in energy price risk management, in a report. “Foreign oil companies operating in Libya evacuated workers, and some were reportedly suspending operations.”

Italian oil giant Eni (E), the largest foreign oil company in Libya, and Spain’s Repsol said Wednesday they had suspended some of their production operations in Libya.

Other firms reportedly suspending producing in Libya include Germany’s Wintershall, part of BASF, Austria’s OMV and France’s Total (TOT). The largest oil firm in the country is the Libyan government-run National Oil Corporation.

BP (BP) and Chevron (CVX, Fortune 500) said earlier this week that it was evacuating most of its employees in Libya.

The unrest in Libya follows an uprising in Egypt, where anti-government protesters withstood a violent crackdown and toppled the long-standing regime of Hosni Mubarak earlier this month. The movement was inspired by similar events in Tunisia earlier this year.

Oil prices have been supported by concerns that other major oil exporting nations in the Middle East could be shaken by political unrest.

Protests have roiled the small island nation of Bahrain, which has raised fears that neighboring Saudi Arabia could be vulnerable. In addition, traders are concerned that the amount of spare oil in global reserves may not be enough to offset widespread supply disruptions in the region.

— The CNN Wire Service contributed to this report.