* Brent hits 32-month high of $124.84 on Libya oil attacks
* Market nervous ahead of Nigerian elections
* Boom in commodities piles on inflationary pressure
(Updates prices and analyst comments)
By Nia Williams
LONDON, April 8 (Reuters) - Oil hit a 32-month high near
$125 on Friday after attacks on Libyan oil fields raised the
prospect of long-term supply cuts, with commodities in general
rising on optimism global economic recovery will fuel demand.
Ongoing unrest in the Middle East and concerns postponed
elections in Nigeria could spark a new wave of militant violence
and disrupt supply also contributed to the bullish mood in the
market. [][]
By 1216 GMT Brent was up $1.82 to $124.49, after earlier
climbing more than $2 to just below $125. U.S. crude <CLc1>
climbed $1.29 to $111.59, down from slightly an intra-day peak
of $111.90 last reached in September 2008.
"Troubles in Libya mean Gaddafi has caused damage to the
Sirte basin which has about two thirds of their oil, there's
dollar weakness and some very large fund action piling into the
market in oil and base metals," said Rob Montefusco, an oil
trader at Sucden Financial.
"People are saying the target is $150 but if we get up there
it will come off pretty quickly. I don't think this is a
sustainable rally because we're not seeing real demand pick up."
Rebels and forces loyal to embattled leader Muammar Gaddafi
exchanged bitter accusations over who had attacked oilfields and
infrastructure vital to both sides. []
The seven-week old civil war has cut Libya's 1.6 million
barrels per day output by 80 percent to between 250,000 and
300,000, a senior government official said. []
It took Kuwait two years to restore oil production to
pre-war levels of about 1.6 million bpd, similar to Libya's
pre-conflict production, after the 1991 Gulf War, according to
International Energy Agency data.
Fellow OPEC member and 1.9 million bpd producer Nigeria
postponed parliamentary elections again in some areas although
polls will go ahead in most of the country on Saturday as
planned. []
"Upcoming elections in Nigeria has already seen an uptick in
violence in oil rich states of Akwa Ibom and Balyesa, with any
loss in Nigerian crude (similar in quality to Libya) likely to
put further pressure on light-heavy differentials," said
Barclays Capital analyst Amrita Sen.
Futher supply worries came from Norway where a trade source
said the North Sea Oseberg crude oil stream will load 118,000
barrels per day in May, significantly down from the provisional
programme of 160,000 bpd in April.
COMMODITIES BOOMING
Crude prices rallied in step with gains across the
commodities market where gold hit a record high, driven by a
weaker dollar and positive global outlook despite Portugal's
request for a bailout earlier this week.
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Three-month technical views on 28 commodities:
http://link.reuters.com/pyx78r
Rising oil prices good for equities once again:
http://r.reuters.com/zyt88r
Reuters Insider Special: Doomsday Scenarios for Oil:
http://link.reuters.com/ner88r
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But surging oil 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, and the risk of demand destruction. []
"Awash with still extremely cheap money - the leading policy
approach to cope with the passed recession - the investment
community is pouring record volumes into long commodity
positions," said analysts at JBC Energy in a note.
"This drives not only fuel and food prices to record highs,
but also raises the costs for other raw materials massively,
clearly putting the economic outlook under threat."
(Additional reporting by Randy Fabi and Alejandro Barbajosa;
editing by Keiron Henderson)
