Both Brent and US crude oil rallied to 2.5-year highs on Tuesday on concerns the revolt in Libya could spread to other major oil producers in the Middle East and North Africa. At 1030 GMT,Brent crude oil futures for April delivery were up $1.12 to $106.86,after earlier touching $108.57,while US crude for April delivery was up at $96.68 as investors and traders became increasingly nervous about contagion. Libya alone doesn't produce so much oil that there would be a supply shortage . even if there was a total collapse,said Carsten Fritsch,an analyst at Commerzbank. It produces around 1.6 million barrels of oil per day,and OPEC has spare capacity of up to 6 million barrels,so it is more fears that this might spread to places like Algeria,Kuwait or the United Arab Emirates,he added. Libya is the third-largest oil producer in Africa,and at least some 100,000 barrels per day - about 6 per cent of the country's production - have been shut in. Analysts at JBC Energy said given that some of its major oil fields are controlled by more or less independent tribes and the apparent loss of control of the regime of the coastal city of Benghazi,the country's splitting up could not be ruled out. Fighting has spread to the capital Tripoli. Amid reports that African mercenaries are being used to crack down on protesters,some army troops have switched sides to the opposition. European oil and gas firms such as Shell have evacuated staff and German company Wintershall has wound down production as a precautionary measure. The Arab League plans to hold an emergency meeting in Cairo at 1500 GMT to discuss the Libyan revolt. World leaders have condemned the use of force against protesters in Libya,where at least 233 have been killed,according to Human Rights Watch. Cracks are now appearing among Gaddafi's supporters,with some ambassadors resigning and the Libyan mission to the United Nations calling on the army to move towards Tripoli and cut the snake's head. US crude for March delivery,which expires on Tuesday,was up at $93.77 after also earlier touching a 2.5-year high at $94.49. There was electronic trading in New York on Monday,but no settlement close as the exchange was closed for a holiday.
