Oil climbs in Asia on Libya fear

The price of crude oil has risen in Asia on worries that production may be disrupted by ongoing unrest in Libya.

Brent crude was trading at $116.44 a barrel, hovering near two-and-half year highs. US light, sweet crude was at $104.88.

The latest price rises follow 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.

Emergency meeting

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

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

On Tuesday 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 and Japan’s main Nikkei 225 Index slid 1.1% in morning trade. South Korea’s KOSPI dropped 1.2%.

The main stock markets in London, Paris and Frankfurt all ended Wednesday down about half a percent.

On Wall Street, the Dow Jones index fell 0.4%, but later recovered to end the day virtually unchanged.

‘Will fight’

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.