With Libya lurching closer towards civil war, the markets are getting more and more nervous – not least the oil market.
Brent crude rose another 1.8 per cent on Monday, taking the April contract to a new 2011 high of $118.11 a barrel. That’s a cumulative increase of nearly 20 per cent since the unrest started in mid-January in Tunisia.
As Charles Robertson, the chief economist at Renaissance Capital, said in a note:
Right now economists are trying to work out whether to revise all of their forecasts on the back of higher oil prices, while hoping that an easing of tension in the Middle East will make this unnecessary. Post-Libya, we are no longer confident that oil prices will fall back towards $90/bbl in the coming weeks and, if unrest spreads to Saudi Arabia or Iran, we could see oil prices surging past $130/bbl.
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