Oil prices continued to set new post-recession highs Monday as forces loyal to Moammar Gadhafi pounded rebels near a key oil port in Libya. It's unclear how long the country's oil exports will be cut off, and traders prepared for a worst-case scenario in which world supplies would be under pressure for months.
Benchmark West Texas Intermediate crude for April delivery gained 52 cents at US$104.95 a barrel in midday trading on the New York Mercantile Exchange. The price almost hit $107 per barrel earlier in electronic trading, the highest since Sept. 26, 2008.
In London, Brent crude added 32 cents at $116.29 per barrel on the ICE Futures exchange.
Libya, which sits on the largest oil reserves in Africa, has been engulfed in a four-week rebellion as militants try to oust Gadhafi after 41 years in power. Officials in the country say oil fields continue to operate, but daily exports of 1.5 million barrels could be cut off for some time.
On Monday, Libyan warplanes launched more airstrikes on rebel positions around the Ras Lanouf oil port as forces loyal to Gadhafi tried to keep rebels from advancing on his stronghold in the capital, Tripoli.
Saudi Arabia has increased production to make up for the loss of Libyan crude, which goes mainly to Europe. The Obama administration was also considering tapping the U.S. strategic oil reserves of 727 million barrels.
