OIL FUTURES: Crude Jumps On Middle East Unrest, Iran Protests

NEW YORK (Dow Jones) - Crude futures soared Tuesday, reaching the highest level in nearly two years amid concern that Middle East turmoil is spreading to the main oil-producing states.
Light, sweet crude for April delivery closed $ 2.66, or 2.7%, higher at 99.63 dollars per barrel on the New York Mercantile Exchange. Brent crude on the ICE futures settled $ 3.62 higher at $ 115.42 a barrel.
Oil markets focused on reports of increased violence in Libya, where opposition forces and those loyal to Muammar Gaddafi continued to fight for control of the country. However, its possible spread to the richer countries that produce most of the world's oil supplies - such as Iran and Saudi Arabia - U.S. equity futures pushed toward $ 100 a barrel.
Iranian security forces fired tear gas in clashes on Tuesday with protesters demanding the release of opposition leaders, an opposition website reported. Meanwhile, the Saudi market Tadawul shares sank 6.8% as investors worried about the escalation of unrest in neighboring Bahrain.
"This is not an isolated incident, this will continue. We have a military coup in Egypt, we have a civil war in Libya, we have the fears of contagion," said Stephen Schork, head of oil trading advisory firm The Schork Report . "This is not like the fall of Eastern Europe. We have an absolute power vacuum here, nobody knows how it will play."
Iran is the second largest oil producer in the Organization of Petroleum Exporting Countries, exporting 2.4 million barrels a day, according to the U.S. Department of Energy.
Saudi Arabia, OPEC's largest producer, increased production at a rate of nine million bpd, up 500,000 barrels per day to offset the fall in production in Libya. Kuwait has also indicated it could use its spare production capacity of about 200,000 barrels a day when more of production in Libya is closed.
Tom Bentz, an oil analyst and broker at BNP Paribas Commodity Futures, said that everything connected with the unrest in or near Saudi Arabia is going to cause a "major reaction" in oil prices. "Especially because we already have two-thirds of Libya out of the market production," he added.
The market is well supplied at the moment, especially in the U.S., where the weekly inventory data Wednesday was expected to show rising inventories of crude oil. Analysts surveyed by Dow Jones Newswires expect crude inventories rose by a million barrels last week, along with an increase of 100,000 barrels in gasoline stocks. Inventories of distillates, which include heating oil and diesel, are seen by a million barrels.
The American Petroleum Institute, an industry group said late Tuesday crude stocks fell in U.S. 1. 1 million barrels last week. Gasoline stocks fell by 4.9 million barrels, while distillate stocks fell 1.4 million barrels.
The report helped oil prices above $ 100 a barrel after hours, and added to earlier gains in gasoline and heating oil.
Front-month April reformulated gasoline blendstock, or RBOB, settled 9.07 cents, or 3.1%, above $ 2.9834 a gallon, the highest close since August 2008. April heating oil settled 8.46 cents to $ 2.9834 a gallon, the highest close since September 2008.
More information on settlements and highs and lows of the future platforms Nymex and ICE can be found by searching for the following headlines:
Close Nymex light crude oil
Port Nymex RBOB Gasoline Close
Nymex Heating Oil Close
Brent crude oil close
ICE Gas Oil Close

(Source: http://online.wsj.com/article/BT-CO-20110301-716433.html)