Oil Slips From Two-Week High on Speculation Mideast Risk Limited to Libya

Crude oil retreated from its highest price in almost two weeks amid speculation that supply disruptions from political instability in North Africa and the Middle East may be limited to Libya.
Futures decline after rising to 0.3 percent. Protesters in Yemen spent the night in the streets to keep the pressure on President Ali Abdullah Saleh, who is facing an internal revolt in growth. The tension in the region is adding a risk premium of $ 15 to $ 20 per barrel Brent oil price, according to Société Générale SA.
"The riots in Libya appears to have almost fully priced in by now," said Eugen Weinberg, head of commodities research at Commerzbank AG in Frankfurt, in an interview with Bloomberg Television. "The price will remain at high levels around $ 110 to $ 120 for several months and will fall back to $ 90 by year end."
Crude for April delivery on the New York Mercantile Exchange fell 64 cents, or 0.6 percent, to $ 101.69 a barrel, from 12: 30 pm London time, after climbing as high as $ 102.67. Yesterday, he won $ 1.26 to $ 102.33, the highest close since March 10. The April contract expires today. The more actively traded May futures fell 67 cents, to $ 102.42 a barrel. Brent crude for May settlement was at $ 114.34, for 62 cents on the ICE Futures Europe exchange in London after rising to 0.5 percent. The difference between the two contracts was extended to May $ 11.92 to $ 11.87 a barrel yesterday.
Regional disturbances
regional crisis has toppled leaders Tunisia and Egypt, and came to Yemen, Bahrain and Syria. Societe Generale raised its forecast for Brent crude at $ 11 on average $ 109 a barrel this year as increased political risks, analysts led by Michael Wittner, said in a report dated yesterday.
Allied forces are expanding their air campaign on Libya in an effort to frustrate fighters Muammar Gaddafi and allow the rebels to control the cities, such as the capital of the opposition in Benghazi, which had been attacked by troops loyal to the regime. The Libyan leader denounced the allied coalition against him, including the U.S., the UK and France as "the party of Satan."
Libya's output has been reduced to less than 400,000 barrels a day, Shokri Ghanem, chairman of Libya's National Oil Co., said March 19. The country produced 1.59 million barrels per day in January, according to estimates compiled by Bloomberg. Exports may be arrested for "many months" due to sanctions and damage to facilities, the International Energy Agency said.
oil production in Libya is likely to remain suspended for the rest of this year, said Lawrence Eagles, head of commodities research at JP Morgan Chase & Co. in New York.
Protest in Yemen
Thousands of Yemenis spent the night in the streets across the country to keep the pressure on President Ali Abdullah Saleh, who faces a growing internal revolt of the military leaders, ministers and diplomats. Yemen produced nearly 298,000 barrels of oil per day in 2009, according to BP Plc.
Military officials, including Ali Muhsin al-Ahmar, commander of the First Armored Division and Muhssein Ali Mohammed, commander of the eastern region, left the regime of the night. His decision was a result of repression of three days ago that left dozens dead, said Mohammed al-Sabri, a leader of the opposition.
Government of Bahrain declared a state of emergency three months on March 15 after troops from Saudi Arabia and other Gulf Arab states arrived to help in suppressing more than a month of protests.
Japan is the delivery of additional relief supplies in the areas most affected by the earthquake of March 11, workers restored power to two reactors at a plant paralyzed Dai-Ichi Fukushima nuclear power yesterday, prompting Prime Minister Naoto Kan means that it was "light at the end of the tunnel."
Short-term drop
"The recent tragic events in Japan will result in a sharp drop in short-term economic activity, but is likely to be followed by a strong recovery led by reconstruction and replacement of durable goods, which would boost demand for many commodities "said analysts at Societe Generale.
Japan was responsible for 5.2 percent of global oil demand in 2009, according to BP, which publishes its Statistical Review of World Energy each June. Japan is the third largest oil-consuming, after the U.S. and China.