* Libya stalemate supports oil prices
* Investors worry about supply ahead of Nigerian elections
* Coming up: CFTC positions data at 3:30 EDT Friday
(Recasts, updates prices and market activity, changes byline
and dateline from previous LONDON)
By Robert Gibbons
NEW YORK, April 8 (Reuters) - Brent crude jumped to a
32-month high above $125 on Friday as commodities climbed in
unison on a weaker dollar after attacks on Libyan oil fields
made long-term supply cuts more likely.
Brent was poised for a fourth consecutive weekly gain, and
its 5 percent rise would be the largest percentage rise since
the week to Feb. 25.
In addition to the Libyan conflict, ongoing unrest in the
Middle East and bomb attacks intended to postpone Nigerian
elections added to oil supply concerns. For details, see
[] and []
Brent crude for May <LCOc1> rose $2.71 to $125.38 a barrel
by 11:50 a.m. (1550 GMT), having hit $125.79, the highest
front-month price since August 2008.
U.S. crude <CLc1> rose $1.43 to $111.73 after earlier
reaching $111.90, the highest intraday price since September
2008.
U.S. crude trading volumes lagged Brent near midday Friday
in New York. U.S. crude volumes the previous two weeks were the
lowest weekly volumes for 2011.
"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.
Libya's civil war has cut its normal output of 1.6 million
barrels per day (bpd) by 80 percent to between 250,000 and
300,000 bpd, according to a senior government official.
NATO leaders have acknowledged the limits of their air
power, with analysts predicting a drawn-out conflict.
[]
Libya's fellow OPEC member Nigeria, which produces 1.9
million bpd, 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 have already seen an uptick
in violence in the 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.
COMMODITIES BOOMING
Crude prices rallied in step with gains across the
commodities markets, where gold hit a record high, driven by a
weaker dollar and a positive global outlook despite Portugal's
request for a bailout earlier this week. []
A weaker dollar often lifts dollar-denominated commodities
because they become attractive as a hard-asset inflation hedge
and demand can be stoked by cheaper prices for consumers using
other currencies.
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
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
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
"New investment flows at the start of the quarter are
driving oil and gold this morning, with the strong rise over
the past week attracting trend followers and more fund money,"
said Michael Guido, director of hedge fund energy sales at
Macquarie Bank in New York.
"The uptrend is still very much intact, with key technical
levels being taken out."
The surge in oil prices is stoking inflationary concerns
worldwide due to the potential adverse impact on economic
growth and the risk of demand destruction.
(Additional reporting by Gene Ramos and David Sheppard in New
York, Nia Williams in London and Randy Fabi and Alejandro
Barbajosa in Singapore; editing by Jeffrey Benkoe)
