Oil Rises for Sixth Day, Yen Strengthens on Libya as Asia Stocks Fluctuate

Oil advanced for a sixth day in New York after reaching $100 a barrel as Libya’s violent uprising cut shipments from Africa’s third-biggest producer. The yen and Swiss franc strengthened, while Asian stocks fluctuated.

Crude for April delivery rallied 1.3 percent in New York to $99.39 a barrel at 10:20 a.m. in Tokyo. Brent reached a 30-month high in London. The yen and franc rose against all of their major peers. The euro climbed toward a three-week high against the dollar on concern faster inflation will spur higher interest rates. Gold added 0.2 percent. The MSCI Asia Pacific Index rose 0.2 percent, erasing a 0.3 percent loss. Standard & Poor’s 500 Index futures added 0.2 percent following a two-day drop.

Loyalists of Libyan leader Muammar Qaddafi sought to crush dissent in the capital, Tripoli, as his opponents tightened control of eastern cities, with Total SA and OMV AG becoming the latest energy producers to scale back their operations in the North African nation. Data tomorrow may show German consumer prices climbed this month, joining economic reports this week that showed inflation is accelerating from Singapore to Vietnam.

“We’re having a natural reaction to the unrests with oil going above $100,” Todd Martin, Societe Generale’s Asia equity strategist, said in a Bloomberg Television interview in Hong Kong. “We could see GDP growth forecasts downgraded slightly.”

Brent crude gained as much as 1.8 percent to $113 a barrel on the London-based ICE Futures Europe exchange, taking its four-day rally to 10 percent. The April contract for West Texas Intermediate oil rose as much as $4.58 yesterday to touch $100, before settling at $98.10.

‘Upside Risk’

The cuts in Libya create “significant upside risk” to oil prices by reducing OPEC’s ability to absorb any further supply disruptions in the Middle East, according to Goldman Sachs Group Inc. Libya pumped 1.6 million barrels of oil a day in January, enough to meet 8 percent of U.S. demand, according to data compiled by Bloomberg.

The fighting in Libya, which holds Africa’s largest oil reserves, is the most violent yet seen in six weeks of popular uprisings across the Middle East and North Africa, which have already unseated longtime rulers in Tunisia and Egypt. U.S. President Barack Obama called for international pressure on Qaddafi’s regime to end its attacks.

Copper for three-month delivery climbed 1.2 percent to $9,534.5 a metric ton in London as metals extended their rebound from the biggest drop in almost a month. Wheat gained for a second day, rising 0.5 percent to $8.025 a bushel and rallying from a two-month low yesterday. Gold for immediate delivery gained 0.2 percent to $1,414.72 an ounce, within 1.2 percent of its record $1,431.225 an ounce on Dec. 7.

‘Reducing Risk’

The yen climbed to 82.23 per dollar from 82.51 in New York, after touching 82.20, the strongest since Feb. 9, as violence in Libya spurred demand for safe-haven currencies. The Swiss franc climbed to a record high of 0.9276 per dollar before trading at 0.9288 from 0.9330 yesterday.

“The situation in the Mideast and Libya appears to be deteriorating,” said Tsunemasa Tsukada, chief manager for currencies and financial products in Tokyo at Mitsubishi UFJ Trust & Banking Corp., a unit of Japan’s largest financial group by market value. “Investors are probably reducing risk right now, with money likely to go into the yen and the Swiss franc.”

The euro rose to $1.3772 from $1.3749 in New York, when it reached $1.3787, the highest since Feb. 3, on speculation the European Central Bank will increase interest rates before the Federal Reserve to curb oil-driven inflation.

German EU-harmonized consumer prices gained 0.5 percent after falling 0.5 percent in January, according to the median estimate of economists in a Bloomberg News survey before tomorrow’s data. ECB policy makers will make the decisions necessary to maintain price stability, President Jean-Claude Trichet told reporters yesterday in Frankfurt.

Quicker Inflation

Malaysia’s ringgit weakened 0.2 percent to 3.0530 against the dollar and the South Korean won slid 0.2 percent to 1,126.05. Prices in Malaysia climbed at the fastest pace since mid-2009, while Singapore’s inflation rate rose to a two-year high of 5.5 percent in January, reports yesterday showed. Vietnam’s consumer prices gained the most in 24 months in February.

New Zealand’s dollar fell toward the weakest level in a decade versus Australia’s on prospects the smaller nation’s central bank will cut interest rates next month after an earthquake likely dented growth. The so-called kiwi fell to NZ$1.3459 per Aussie from NZ$1.3437 yesterday, when it dropped to NZ$1.3476, the weakest since Dec. 23.

MSCI’s Asian index earlier fell as much as 0.3 percent, after dropping 2.5 percent in the previous three sessions. Qantas Airways Ltd. and AirAsia Bhd. lost more than 3 percent, leading airlines lower. Energy producers gained, with Cnooc Ltd. and PetroChina Co. climbing 1.4 percent each.

The S&P 500 posted yesterday its biggest two-day slump in six months following the surge in oil prices. The slump in stocks worldwide has wiped out more than $1.2 trillion since Feb. 18, when global market values reached the highest level since June 2008, according to data compiled by Bloomberg.

To contact the reporters on this story: Shiyin Chen in Singapore at schen37@bloomberg.net.

To contact the editor responsible for this story: Clyde Russell at crussell7@bloomberg.net

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Oil Touches $100 a Barrel for First Time in Two Years

Phil Weymouth/Bloomberg

An oil pump operates in the Awali oil field in Bahrain.

An oil pump operates in the Awali oil field in Bahrain. Photographer: Phil Weymouth/Bloomberg

1:32

Feb. 23 (Bloomberg) -- Bloomberg's Deborah Kostroun reports on the performance of the U.S. equity market today. U.S. stocks fell, dragging benchmark indexes to the biggest two-day drop in six months, as oil surged to $100 a barrel amid growing tensions in the Middle East and Hewlett-Packard Co.’s forecasts trailed analysts’ estimates. (Source: Bloomberg)

12:35

Feb. 23 (Bloomberg) -- Drew Matus, senior U.S. economist at UBS Securities LLC, talks about the impact of oil prices on the U.S. economy. He speaks with Tom Keene on Bloomberg Television's "Surveillance Midday." (Source: Bloomberg)

9:49

Feb. 23 (Bloomberg) -- Charles Lieberman, chief investment officer at Advisors Capital Management LLC, and Dan Deming, managing director at Stutland Equities LLC, talk about the impact of higher oil prices on the U.S. economy and stock market. They speak with Matt Miller, Carol Massar, Dominic Chu and Julie Hyman on Bloomberg Television's "Street Smart." (Source: Bloomberg)

4:31

Feb. 23 (Bloomberg) -- Mark Zandi, chief economist at Moody's Analytics Inc., discusses the potential impact of high oil prices on the U.S. economy and the outlook for states facing fiscal challenges. Zandi talks with Margaret Brennan on Bloomberg Television's "InBusiness." (Source: Bloomberg)

4:44

Feb. 23 (Bloomberg) -- John Mauldin, president of Millennium Wave Investments LLC, talks about the possible impact rising oil prices may have on the U.S. trade deficit. Mauldin, speaking with Margaret Brennan on Bloomberg Television's "InBusiness," also discusses the implications of the political unrest in the Middle East and Africa on investor sentiment. (Source: Bloomberg)

Feb. 23 (Bloomberg) -- Nick Beecroft, a senior foreign-exchange consultant at Saxo Bank A/S, comments by video message on the impact of political unrest in North Africa and the Middle East on the price of oil. (Source: Bloomberg)