Big gains for crude as Libyan turmoil continues

prices rise by almost 7% for the week

Oil prices set a new record high of $104.60 per barrel at Nymex in the April contract just before they closed with a 2.5% gain at $104.42 per barrel on Friday, 04 March 2011.

For the week, the energy component climbed 6.7%, which was primarily underpinned by continued concern about social and political volatility in North Africa and the Middle East.



News reports indicated the Libyan opposition had rejected a mediation proposal by Venezuelan President Hugo Chavez.

Also on Friday, investors weighed news that the jobless rate fell to 8.9%, its lowest level since April 2009, and the economy added 192,000 jobs in February. The payrolls growth came in below expectations as market was expecting an addition of 218,000 jobs.

In the latest weekly inventory report, EIA reported during the week that crude supplies were down 400,000 barrels for the week ended 25 February 2011 to stand at 346.4 million. Motor gasoline supplies fell 3.6 million barrels and distillate stocks lost 800,000 barrels in the latest week. Market had expected crude stocks to be up 1.6 million barrels, and gasoline stocks to increase 900,000 barrels. Distillates supplies were seen down 1.8 million barrels.

Among other energy products on Friday, April heating oil tacked on 4 cents to $3.089 a gallon, and April gasoline rose 2 cents to $3.046 a gallon.

Natural gas prices finished 0.7% higher at $3.81 per ounce. That put an end to its three-session slide. Still, natural gas prices ended the week down about 5%.