Oil price rises as allied air strikes hit Libya

21.03.11

Oil prices have climbed as air strikes in Libya threaten to disrupt supply from the country, North Africa’s third-biggest producer.

Futures advanced up to 2.3% after Muammar Gaddafi vowed to retaliate to missiles and warplanes against Libyan military installations.

Allied officials say the air strikes have left Gaddafi’s air force mostly grounded, halting pro-government advances into the rebel stronghold of Benghazi.

Libyan crude output has fallen to less than 400,000 barrels a day.

The country produced 1.59 million barrels a day in January, according to estimates compiled by Bloomberg. Exports may be halted for “many months” because of sanctions and damage to facilities, the International Energy Agency said.

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