Air strikes on Libya push up oil price

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LONDON, Mar 21 (Agencies): World oil prices rallied on Monday after Western air strikes were launched on key crude exporter Libya over the weekend. New York's main contract, light sweet crude for delivery in April, added $2.10 to $103.17 a barrel. In London early afternoon trade, Brent North Sea crude for May won $2.22 to $116.15 per barrel. French, American and British forces have launched the biggest intervention in the Arab world since the 2003 US-led invasion of Iraq, firing more than 120 Tomahawk Cruise missiles and conducting bombing raids into Libya on Saturday. The action by the US, Britain and France came after the UN Security Council authorised the use of "all necessary means" to protect civilians and enforce a ceasefire and no-fly zone against Libyan leader Moamer Gaddafi's forces. "Oil prices have gone up due to military attacks in Libya from UN forces," said Victor Shum, senior principal for Purvin and Gertz international energy consultants in Singapore." "More oil installations could be damaged due to collateral damage and internal sabotage," Shum said. "The unrest in the Middle East and North African region may spread to other (parts of the) region, and hence the contagion effect on oil prices remain. Oil supply disruption is going to support prices in its triple digits." Before the unrest, Libya was producing 1.69 million barrels a day, according to the International Energy Agency. Of this 1.2 million barrels were exported, mostly to Europe. Other major customers are China and the United States. An airstrike against an administrative building in a compound including Gaddafi's residence in Tripoli destroyed the Libyan leader's "command and control capability," a coalition official said. The building, which was about 50 meters (165 feet) from the tent where Gaddafi generally meets guests, was flattened. Following new air strikes on Libya overnight by western forces, Libyan government forces pulled back 100 kilometres (60 miles) from the rebel-held stronghold of Benghazi but showed they still had plenty of fight as they beat off an insurgent advance. Coalition officials said a no-fly zone was effectively in place over the country, and the rebels could assume that any aircraft is friendly, with French warplanes continuing to patrol Libya unchallenged after British said its missiles targeted remaining Libyan air defences overnight. A Libyan military spokesman announced a new ceasefire in the campaign against the uprising, but the United States promptly accused Tripoli of lying or of breaching the truce immediately. The head of Britain's armed forces said Gaddafi was "absolutely not" a target for military action. The United States said it had no evidence of civilian casualties in air strikes by coalition forces after Tripoli's official media said the air strikes were targeting civilian objectives. Libyan opposition officials were to be received at the French foreign ministry as France resumed air patrols over the north African country, a ministry spokesman said. Two Agence France-Presse journalists have been missing since Saturday while working in the eastern Tobruk region. In Moscow, Russian Prime Minister Vladimir Putin Monday slammed the UN resolution allowing military action on Libya as a "medieval call to crusade" and hit out at Washington for its readiness to resort to force. In one of his most virulent diatribes against the West in years, Russia's de facto number one said there was no "logic" or "conscience" to the military action. "The resolution by the Security Council, of course, is defective and flawed," Russian news agencies quoted Putin as telling workers on a visit to a missile factory. "To me, it resembles some sort of medieval call to crusade when someone would appeal to someone to go to a certain place and free someone else." Putin's comments marked a sharp hardening of Moscow's rhetoric against the Western military action on Libya after Russia abstained from the UN resolution last week, refusing to use its veto which would have blocked its passage. A top French official said Monday, the international military intervention in Libya is likely to last "awhile," echoing Moammar Gaddafi's warning of a long war ahead as rebels said they were fighting to reclaim a city under the Libyan leader's control. Henri Guaino, a top adviser to the French president, said two nights of bombing runs and missile attacks had hobbled Libya's air defenses, stalled Gaddafi's troops and all but ended attacks on civilians. Guaino, asked how long the allied efforts would continue, replied simply: "Awhile yet." Rebels in Benghazi said they were trying to reclaim the nearby city of Ajdabiya, which had been surrounded by government troops before the international campaign began. "There are pro-Gaddafi forces inside fighting rebel fighters. There is fighting and shelling going on," said Ahmad Mohammed, 26, who returned from the front Monday and manning a checkpoint in Zeitouniya. New fighting also broke out Monday in Misrata, the last rebel-held city in western Libya, according to reports from Al-Jazeera and Al-Arabiya. In Cairo, a group of Libyans angry at the international intervention in their homeland blocked the path of U.N. Secretary-General Ban Ki-moon following his meeting at the Arab League on Monday. Ban had finished talks with the Arab League chief Amr Moussa and left the organization's headquarters in Cairo to walk around nearby Tahrir Square, the centerpiece of Egyptian uprising that last month toppled Hosni Mubarak, when dozens of Libyan protesters converged on him and his security detail. What happens if rebel forces eventually go on the offensive against Gaddafi's troops remains unclear. Rebels defended their support of the international intervention into Libya - apparently feeling the sting of criticism from other Libyans and Arabs who warned the country could be divided or collapse into a civil war. "Libya will not turn into Somalia or Iraq. It will not be divided. We are battling - the Libyan people - are battling a gang of mercenaries," Mohammed al-Misrati, a rebel spokesman in the stronghold of Misrata, told Al-Jazeera on Monday. Arab League Secretary General Amr Moussa, who supported the UN resolution, on Sunday criticised the severity of the bombardment. Bangladesh has welcomed the United Nations Security Council (UNSC) resolution on Libya. But at the same time, it has also urged restraint in the implementation of no-fly zone resolution, according to a foreign ministry press release on Monday. The release also reiterated the need for dialogue within Libya to find a peaceful solution to the current crisis. "We welcome the fact that the resolution aims at protecting civilians and civilian-populated areas under threat, and excludes categorically an occupation force," it stated. The foreign ministry further said, "We reiterate, in line with the UNSC resolution, the need for a dialogue within Libya to find a peaceful solution to the current crisis in keeping with the aspirations of the Libyan people." Military action should be resorted to only when absolutely essential and solely for neutralising military targets, the release stressed, adding, "Bangladesh is closely following the evolving situation in Libya." "We have taken note of the adoption of UN Security Council Resolution 1973 (2011), which calls for immediate ceasefire inside Libya and a complete end to violence," foreign ministry stated. It went on to say that for Bangladesh, the primary concern was regarding the safety, particularly of Bangladesh nationals, located in various parts of Libya, and all civilians in general.