Oil jumped by over $1 a barrel, as violent clashes in OPEC-member Libya heightened fears of social unrest spreading across the Middle East and North Africa and disrupting supplies in the major oil-producing region.
Protests against Muammar Gaddafi, leader of Libya which produces 1.58m barrels per day of crude, spread to the capital Tripoli and his son vowed to fight until the "last man standing," after scores of protesters were killed in the eastern city of Benghazi.
Brent crude for April delivery rose $1.02 to $103.54 a barrel.. On Friday, Brent settled at $102.52, its fourth-straight weekly rise.
US crude for March delivery rose $1.10 to $87.31 a barrel, after hitting a high of $87.63.
"I would be worried if the unrest spreads to Saudi Arabia," said Benson Wang of Commodity Broking Services in Sydney.
The leader of the Al-Zuwayya tribe in eastern Libya threatened on Sunday to cut oil exports to Western countries within 24 hours unless authorities stop what he called the "oppression of protesters.
Other analysts fear that continued violence in Libya and tensions across the region could lead to further price hikes, issues which are likely to dominate talks in Saudi Arabia this week aimed at narrowing the gap between consumer nations and resource-holders.
"The oil market could easily jump another $10 in a short time if the violence continues," said David Cohen, Director of Asian Economic Forecasting at Action Economics.
City A.M. Reporter