Oil price hits two and a half year high

Oil has hit a new two-and-a-half year high triggered by increasing worries over the situation in Libya.

The cost of a barrel of US light, sweet crude reached $108.78 on on expectations of rising demand.

Meanwhile, Brent crude, rose to $119.75 a barrel, just below the peak of $119.79 it hit in February, when the Libyan crisis began.

Libya is the world's 17th largest oil producer, with a share of more than two per cent of the world market.

Carsten Fritsch, analyst at Commerzbank in Frankfurt, said:
"In the short term, oil prices look very well supported."