Oil prices surge as turmoil rages in Libya
Fears of a gas price spike came closer to reality Wednesday as oil prices hit $100 a barrel in New York for the first time since October 2008, as turmoil in Libya threatened to halt exports.
Crude for April delivery climbed as much as 4.8 percent to $100 at 1:07 p.m. in New York and gasoline and heating oil surged, Bloomberg reported. The Standard & Poor’s 500 Index slid 0.8 percent after tumbling 2.1 percent yesterday, the most in six months.
Concern that surging fuel prices will derail the global economic recovery grew as governments evacuated thousands of expatriates from Libya and opponents to Muammar Qaddafi took control of eastern port cities in Africa’s third-biggest crude supplier. An extended $10 rise in oil cuts 0.5 percentage point off U.S. growth over two years, according to Deutsche Bank AG.
“It’s economic momentum versus geopolitical events,” said Tommy Huie, who oversees about $33 billion as president and chief investment officer of M&I Investment Management in Milwaukee. “The U.S. equity market wants to look beyond the current events in the Middle East. That’s part of the dynamic of a better economy and corporate profits. Obviously, it will all depend on the price of oil and Libya and whether we get more stability sooner rather than later.”
Gasoline rose for a third day on the New York Mercantile Exchange, gaining 4.7 percent to a more than two-year high of $2.7236 a gallon.