Libyan turmoil weighs on stocks as oil surges

Pan Pylas, AP Business Writer, On Tuesday February 22, 2011, 11:49 am

LONDON (AP) -- Mounting concerns over Libya's violent crisis weighed on stocks Tuesday and sent oil prices surging, while the earthquake in the New Zealand city of Christchurch pushed the country's currency sharply lower.

With deep rifts opening up in Moammar Gadhafi's regime, air force pilots defecting and a bloody crackdown in the capital of Tripoli, investors are fretting over how the crisis will end and what the impact on the North African country's oil production will be.

Libya is the world's 18th largest oil producer, pumping out around 1.8 million barrels a day, or a little under 2 percent of global daily output. The OPEC country also sits atop the biggest oil reserves in the whole of Africa.

With so much uncertainty surrounding a large chunk of the world's daily oil production, market prices surged. Benchmark crude for March delivery was up $4.80 a barrel, or 5.6 percent, at $92.55 a barrel in electronic trading on the New York Mercantile Exchange. Earlier, it had it had been even higher above $94 a barrel.

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