Libya, Middle East unrest cause surge in World oil prices

Brent North Sea crude for delivery in May climbed 49 cents to US$116.19 a barrel in London trade.

New York's main contract, light sweet crude for May, gained 54 cents to US$105.51 per barrel.

"The issues of Libya and Yemen have been driving prices of crude oil up, although Yemen is a small exporter and Libya has been more significant," said John Vautrain of Purvin and Gertz energy consultancy.

"The situation is probably going to last for a while," Vautrain told AFP news agency.

Air strikes against Libya by US, British and French fighters continued to press the markets after an uprising last month forced the closure of more than three-quarters of the country's crude production.

Oil-rich Libya was producing 1.69 million barrels a day before the unrest, according to the International Energy Agency. It is now producing 400,000 barrels a day.

Popular uprisings have already toppled the leaders of Tunisia and Egypt and are are now threatening the rulers of Libya and Yemen while there have also been anti-government movements in Bahrain, Iran, Saudi Arabia, Syria and Yemen.

The spike in oil prices could seriously impact advanced economies by next year, according to a study by the Organisation for Economic Cooperation and Development published yesterday.

It said that if the US$25 per barrel increase in prices since the start of the year is sustained, "activity could be reduced by about 0.5 percentage points in the OECD area by 2012 and inflation could rise by 0.75 percentage points".

The US government's Department of Energy was meanwhile due to publish the latest levels of its crude oil stockpiles today.