Oil prices have increased by over $2 a barrel following the US led attacks on Libya.
Libya is currently the world’s 12th largest oil producer, and prices have increased amid concern that the attacks and fallout may impact on the countries supply of oil.
Brent crude rose $2.26 a barrel, to $116.19, while US light crude increase $2.12 to $103.19 a barrel.
Oil prices have been unstable for several weeks now following the earthquake and subsequent tsunami in Japan, and despite assurances from neighbouring countries that they will meet the demand.
Saudi Arabia and the other OPEC nations have assured the world that they can increase output to make up for what is lost from Libya, claims which calmed the market for a period.
Matthew Lewis of CMC markets claimed that the uncertainty in the middle east was driving market sentiment.
“I can see uncertainty and fear driving the price of oil higher in the short term.”
He added that he felt we wouldn’t see an end to the volatility, until the situation in Libya is sorted.
“At this stage, it looks like Libya has further to play. Gaddafi still seems very defiant,” he said.
“We’ll see further spikes and shocks in the oil market this week,”