Oil close to $102 on Libya’s tensions (Reuters) (24-02-2011)

LONDON – Oil reached 29-month high on Thursday close to $120 a barrel on fears the unrest in Libya could spread to other oil producing countries in the Middle East.

Libyan security has cracked down on anti-government protesters and fighting has spread to the capital Tripoli after erupting in Libya's oil-producing east last week with no signs of leader Muammar Gaddafi stepping down after 41 years in power.

London Brent crude futures LCOc1 rose 5.4 percent to trade above $117 a barrel after touching a 29-month high of $119.79, while U.S. crude futures CLc1 advanced 3.9 percent to above $101 a barrel.

World stocks and copper prices fell for the fourth straight day with investors cutting their risk exposure, while safe-haven gold, Swiss francs and U.S. Treasury prices rose.

World equities measured by MSCI All-Country World Index dropped 0.5 percent, falling for the fourth day in a row after hitting a 30-month high on Friday. The index is still up 2.2 percent this year.

MSCI emerging markets index lost 1.1 percent to extend the loss for the year to 5.9 percent as investors shift out of developing economies to developed markets on concerns over higher inflation.

Europe's FTSEurofirst 300 index lost 0.7 percent, down for the fourth straight session while in Asia Nikkei average fell to a three-week low, down 1.2 percent.

Yields on benchmark 10-year U.S. Treasuries eased 4 basis points to 3.4403 percent, down about 33 basis points from a nine-month high hit earlier this month, while those on German Bunds slipped 1 basis points to 3.120 percent.

Surging oil prices consist a threat to put an end to the recovery in the developed economies and add further inflationary pressure in booming emerging countries.

Source: Reuters