Oil nears $107 as violence escalates in Libya, Bahrain

Brent prices approached $107 in Asian trade Tuesday as violence in Libya and Bahrain threatened to destabilise the key oil-producing Middle East and North African region, analysts said.

Brent North Sea crude for delivery in April gained $1.21 to $106.95 per barrel, surpassing two-year highs reached on Monday.

New York’s main contract, light sweet crude for March delivery, surged $6.45 to $92.65 per barrel on its last trading day.

“Rising violence in Libya and Bahrain are providing support to oil prices, with geopolitics a key focus of the market currently,” said Barclays Capital in a report.

Gunfire rattled Libyan capital Tripoli Tuesday as protesters attacked police stations as well as offices of the state broadcaster and set government buildings ablaze amid resident claims of a “massacre” by gunmen “firing indiscriminately” in Tajura district.

Human Rights Watch said on Monday that at least 233 people had been killed since Thursday in protests inspired by the uprisings in Libya’s neighbours Egypt and Tunisia.

Protesters also overran several cities in the embattled nation as leader Moamer Kadhafi denied Monday he had fled the country he had ruled for four decades.

In Bahrain, Crown Prince HRH Prince Salman bin Hamad Al-Khalifa said Monday it was no longer hosting the 2011 season-opening Formula 1 Grand Prix after mounting fatalities from pro-democracy protesters clashing with police.

Seven demonstrators have been killed since anti-regime protests erupted in Bahrain on February 14, according to an AFP tally based on relatives of victims and opposition officials.

Spreading unrest in the Middle East and North Africa would threaten global crude supply as it is home to major oil-producing nations.