NEW YORK (AP) — Oil prices soared more than 3.5 percent, climbing back above $101 per barrel Thursday after a crackdown on protesters in Bahrain and the U.S. stepped up pressure for U.N. action against Libya's Moammar Gadhafi.
Prices also rose on the expectation that Japan will boost fuel imports as its refineries and factories recover from the earthquake and tsunami disaster. And the world's largest oil consumer, the U.S., reported that unemployment claims dropped to the lowest level since July 2008, raising hopes that oil and gasoline demand will soon increase.
Benchmark crude added $3.44 to settle at $101.42 per barrel on the New York Mercantile Exchange. In London, Brent crude rose $4.21, nearly 4 percent, to settle at $114.65 per barrel on the ICE Futures exchange.
Oil prices have been pushed and pulled in recent weeks by international crises that could have major impacts on world oil supplies and demand.
The rebellion in Libya has halted oil shipments of about 1.5 million barrels per day from that country. Libya produced about 2 percent of the world's oil. Saudi Arabia and other OPEC nations have said they will increase production to cover shortfalls of Libyan oil, which goes mostly to Europe.
On Thursday forces loyal to Moammar Gadhafi continued to advance against rebels in the eastern part of Libya. Gadhafi's rapid advance seems to have spurred the U.S. to press for broader U.N. authorization for international air, sea and land forces to stop Gadhafi's attacks on his own people. The U.S. has said it would not act without United Nations authority. Security Council members appear divided on the matter, with China and Russia doubtful about other countries getting involved in Libya's affairs.
Protests in Bahrain led by Shi'ite Muslims have raised further concerns about the stability of the Middle East. The tiny country doesn't have much oil of its own, but Bahrain is just 15 miles from the Saudi Arabia border and the violence could deepen sectarian divisions between Sunni and Shi'ite Muslims in the region.
Saudi Arabia, ruled by Sunnis, is the world's largest oil exporter and produces about 8.4 million barrels per day, enough to satisfy around 8 percent of world demand.
The Saudis have sent troops to Bahrain as part of a multinational force defending the monarchy there. That move was sharply criticized by Iran's Shi'ite leadership, which recalled its ambassador to Saudi Arabia.
Helima Croft, an analyst with Barclays Capital, said Bahrain could become the new "central front" in an ongoing power struggle between Saudi Arabia and Iran. The violence also could hurt the Saudi's diplomatic relationship with the U.S. That would send shockwaves through oil markets, Croft said.
Saudi Arabia is the only country with enough spare oil production to meet increased world demand "and thus the last word on any attempt to drive down prices through production increases," she said. Analysts say the Saudis can boost their daily production by more than four million barrels.
Meanwhile, there was positive economic news in the U.S. The Labor Department said Thursday that applications for unemployment benefits fell last week, signaling modest job growth. And FedEx Corp. reported higher quarterly revenue. Although profits were hurt by higher fuel prices and severe winter weather, the shipper had a bullish outlook for later this year. Stock markets bounced back after taking a beating on Wednesday. The Dow Jones Industrial Average ended the day up more than 161 points. The Nasdaq and the Standard & Poor's 500 finished higher as well.
Gasoline pump prices dipped for a third day, to $3.546 per gallon, though the national average is still up about 42 cents per gallon since the middle of February. A gallon of regular unleaded is 75.7 cents more expensive than last year.
In other Nymex trading for April contracts, heating oil gained 6.77 cents to settle at $3.0649 per gallon and gasoline futures added 10.69 cents to settle at $2.9506 per gallon. Natural gas rose 22 cents to settle at $4.158 per 1,000 cubic feet. In its weekly report, the Energy Department said the nation's natural gas supplies shrank by 56 billion cubic feet. Supplies are about 1.4 percent above the five-year average.
- The best Christian workplaces in 2015
- Dave Ramsey says: Face the future with a...
- There's a bipartisan new approach to curbing...
- AT&T, as new owner of DirecTV, offers...
- Michelle Singletary: Reading is fundamental...
- Who wins and loses under Obama's stricter...
- What consumers need to know about chip...
- How Facebook plans to change the world with...
- Why the 9 to 5 factory work isn't... 18
- Salt Lake County cities, school... 18
- Who wins and loses under Obama's... 13
- Higher wages a surprising success for... 11
- Contractor fined for employing children... 4
- There's a bipartisan new approach to... 3
- Which Utah city is ranked highest for... 2
- US manufacturing growth slows in July 1