Oil rises above $106 amid Middle East conflict

[March 24, 2011]  SINGAPORE (AP) -- Oil prices rose above $106 a barrel Thursday in Asia amid a wave of violent protests and uprisings in the oil-rich Arab world.

Benchmark crude for May delivery was up 29 cents at $106.04 a barrel at late afternoon Singapore time in electronic trading on the New York Mercantile Exchange. The contract added 78 cents to settle at $105.75 on Wednesday, the highest close since Sept. 26, 2008.

In London, Brent crude was up 8 cents at $115.55 a barrel on the ICE futures exchange.

Oil has jumped 24 percent since Feb. 15 as violent conflict roils the Middle East and North Africa.

Israeli warplanes hit Hamas targets in Gaza early Thursday, retaliating for rocket attacks on Israeli cities and a bus stop bombing in Jerusalem a day earlier.

Coalition missiles strikes have pounded forces loyal to Libyan leader Moammar Gadhafi for five days, giving rebels breathing room to regroup. With Gadhafi refusing to step down and U.S. President Barrack Obama ruling out a land invasion, the conflict could face a stalemate that keeps most of the OPEC nation's 1.6 million barrels a day of crude production shut down longer than investors had initially anticipated.

In Syria, a crackdown on anti-government protests escalated Wednesday as police killed at least 15 demonstrators in the southern city of Daraa. Meanwhile, Yemen declared a 30-day state of emergency in a bid to quell an expanding uprising against the 32-year rule of President Ali Abdullah Saleh.

Crude prices were also lifted by signs U.S. consumers aren't letting rising fuel costs crimp demand. The Energy Department said gasoline inventories fell 5.3 million barrels last week, and gasoline stocks are down 8.9 percent during the last five weeks.

"The bulls got themselves into a tizzy because of the reported draw in gasoline," energy consultant The Schork Group said.

In other Nymex trading for April contracts, heating oil added 1.2 cents at $3.07 a gallon and gasoline gained 0.3 cent to $3.02 a gallon. Natural gas jumped 3.5 cents to $4.37 per 1,000 cubic feet.

[Associated Press; By ALEX KENNEDY]

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