Oil prices reached a 30-month high on Monday as word came that the conflict in Libya will not end anytime soon. By late morning [London], oil traded on the New York Mercantile Exchange at $108.56 a barrel.
Light sweet crude for delivery in May rose 29 cents to $108.23 per barrel in the afternoon -- up from $107.93 on Friday. Brent North Sea crude for May delivery rose 21 cents to $118.91.
Although Libya accounts for less than two percent of daily oil production, unrest in the nation is keeping the price of crude oil high.
OPEC member Kuwait said high oil prices are also due to an outage of Libyan oil supplies as well as the March 11 earthquake that hit Japan. Faruq al-Zanki, CEO of Kuwait Petroleum Corp (KPC), told reporters Monday that KPC is enjoying high oil prices but would like to see them lowered to a normal price.
According to al-Zanki, normal would be somewhere between $90 and $100 a barrel.
Kuwait is still producing its OPEC quota of 2.2 million barrels per day but is capable of raising crude oil production at any time, noted al-Zanki. He also warned that oil prices could spike even higher if unrest spreads to the rest of the Middle East.
Some analysts predict oil prices will likely fall, but warn that another global catastrophe will cause prices to increase.
The price of crude oil is currently at its highest level since September 2008.
In addition to crude oil, heating oil also rose, with a current price of $3.15 a gallon. Gasoline rose an additional 1.6 cents to $3.17 a gallon. Natural gas fell 4.8 cents to $4.31 per 1,000 cubic feet.
