Opec to lift output as oil crisis deepens
Oil’s march towards $120 a barrel sparked a frantic day across financial markets, as Opec members prepared to increase production and investors seeking a â€śsafe havenâ€ť drove the price of gold to a fresh high.
By Richard Blackden
08 Mar 2011
Fears were intensified as Libya witnessed a day of fierce clashes between forces loyal to Colonel Gaddafi and those trying to topple his dictatorship, while in Saudi Arabia, the regionâ€™s biggest oil producer, activists renewed calls for a day of protest later this week.
That helped propel Brent crude as high as $118.50 a barrel, though it later retreated to close down 93 cents at $115.04 in volatile trading. US crude prices briefly jumped to an intra-day high of $107 a barrel.
The unexpected political upheaval sweeping North Africa and the Middle East has caught investors unaware since it erupted at the start of the year. Though an improving world economy had sent oil higher in the final three months of last year, experts say a sustained run at around $120 a barrel risks a serious headwind to the recovery.
â€śEvolving events in the Middle East have to grip the attention of markets until the uncertainty is resolved,â€ť said Steven Weiting, an economist in New York at Citigroup.
Investors werenâ€™t betting on a quick resolution yesterday, as a flight to safer assets pushed the gold price to a new high of $1,444.30.