Oil reached to its highest level since two years on Friday, as supply cuts stemming from attacks on Libyan oil fields offset demand concerns spurred by a major aftershock and new earthquake fears in Japan.
U.S. crude rose 81 cents to $111.11, after touching a peak of $111.19 earlier, the highest since September 2008.
Brent crude rose to an intraday high of $123.50 a barrel, the highest since August 2008.
Surging oil, along with record gold and food prices, have stoked inflationary concerns for governments worldwide due to the potential adverse impact on economic growth of the rising cost of foodstuffs and raw materials.
Unrest in the Arab world has added a $20-25 premium to oil prices since the toppling of regimes in Tunisia and Egypt in the last few months.
World oil markets are “adequately supplied†and prices reflect concerns about unrest in some producing countries and the disaster in Japan, according to United Arab Emirates Energy Minister Mohamed Al-Hamli. “The surge in oil prices are a reflection of geopolitics and natural disaster but not the fundamentals,†he said at an oil conference in Paris.
The current price of oil is harming global economic growth and is a mounting concern for consuming nations, the deputy executive director of the International Energy Agency (IEA) said on Wednesday.
The head of the International Monteary Fund warned in February that if oil prices remain around $120 for an extended period economic growth would be hurt.
