Brent crude settled at US$111.72 after rising past US$114, while light, sweet crude on the Nymex settled at US$96.89.
Earlier in the day, oil prices rose by 2% on news of shutdown of oil production in Libya and on fears that the unrest might spread to Saudi Arabia. However, prices recoiled on an announcement by Saudi state oil company Saudi Aramco that all demands for extra oil had been met coupled with news that Tobruk port in East Libya had reopened and a Chinese tanker was being loaded.
Markets are brooding that King Abdullah of Saudi Arabia may be in line to face the next wave of protests in the Middle East. A letter to the Saudi king complained about the prevalence of corruption and nepotism and a widening gap between state and society. In this country where over 60% of the population is under 30, youth unemployment is about three times the national average and there is an 18-year waiting list for government-provided housing. Saudi Arabia plays a critical role in global oil supplies- It is the world's biggest producer, has the world's largest reserves by far, accounting for OPEC’s additional 4.7 mln bpd.