SINGAPORE — Oil prices hovered above $102 a barrel Thursday in Asia as fierce fighting in Libya appears to have cut crude output in the OPEC nation more than previously estimated.
Benchmark crude for April delivery was up 30 cents at $102.53 a barrel at midday Singapore time in electronic trading on the New York Mercantile Exchange. The contract added $2.60 to settle at $102.23, the highest settlement since Sept. 26, 2008.
In London, Brent crude for April delivery was up 32 cents to $116.67 a barrel on the ICE Futures exchange.
The International Energy Agency said Wednesday that a power struggle between supporters and opponents of Libyan leader Moammar Gadhafi had cut up to 1 million barrels per day of crude production, more than the group's previous estimate of as much as 750,000 barrels per day.
Traders are also factoring in the possibility that political upheaval in other oil-rich countries could pinch global crude supplies.
"The spread of protests into other major oil producing nations such as Oman, Algeria and especially Saudi Arabia could keep this oil market on a boil for some time to come," Ritterbusch and Associates said in a report.
Analysts said sustained oil prices above $100 would eventually undermine consumer demand and threaten global economic growth.
With oil prices "at these elevated levels, the current global economic recovery is at significant risk of stalling," said Richard Soultanian of NUS Consulting.
In other Nymex trading in April contracts, heating oil rose 0.3 cent to $3.06 a gallon and gasoline dropped 0.5 cent to $3.02 a gallon. Natural gas futures were up 0.7 cent at $3.82 per 1,000 cubic feet.