Crude Oil Gains as Libya Violence Intensifies; UBS Raises Brent Forecast

Oil rose for a second day in New York as fighting in Libya, Africa’s third-largest producer, renewed concern that Middle East supplies may be threatened by escalating civil unrest.

Futures advanced as much as 0.7 percent after Libyan leader Muammar Qaddafi’s warplanes bombed the opposition-held city of Benghazi. UBS AG raised its 2011 forecast for Brent crude traded in London because of the turmoil in Libya. Oil climbed as much as 2.5 percent yesterday as violence in Bahrain increased concern that unrest will spill into Saudi Arabia. Prices dropped earlier today amid speculation Japan’s earthquake will curb demand.

Crude for April delivery rose as much as 72 cents to $98.70 a barrel in electronic trading on theNew York Mercantile Exchange, and was at $98.28 at 1:02 p.m. Singapore time. Yesterday, the contract climbed 80 cents, or 0.8 percent, to $97.98. Prices are 18 percent higher than a year ago.

Brent crude for May settlement advanced 5 cents to $110.65 a barrel on the London-based ICE Futures Europe exchange. The April contract rose $2.10, or 1.9 percent, to $110.62 yesterday, when it expired.

UBS raised its Brent crude projection to $103.75 a barrel from $85 because of cuts to output in Libya, analysts led by Melbourne-based Gordon Ramsay said in a report dated yesterday. The bank increased its 2012 estimate by 12 percent to $95.

(Source: http://www.bloomberg.com/news/2011-03-17/crude-oil-gains-as-libya-violence-intensifies-ubs-raises-brent-forecast.html)