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U.S. oil price hits $100 a barrel [Updated]

February 23, 2011 | 11:02 am

The U.S. benchmark oil price briefly hit $100 a barrel on Wednesday as the revolt in Libya escalated, raising new fears about reduced supplies from the world’s 12th-largest oil exporter.

Surging crude drove stock prices sharply lower for a second day.

April oil futures in New York touched $100 a barrel shortly after 10 a.m. PDT, up $4.58, or 4.8%, from Tuesday’s close of $95.42 and nearly $15 above the price just a week ago.

The price pulled back to $98.97 a barrel by about 11 a.m.

[Updated at 1:45 p.m.: Oil futures in New York closed at $98.10, up $2.68 for the day. But the price in London continued to surge, reaching $112.20 a barrel. The London price is considered a more accurate measure of the true global oil price.]

The last time U.S. oil prices were at $100 a barrel was in September 2008, when the price collapsed amid the financial-system meltdown.

On Wednesday, anti-government protesters in Libya claimed control of their first major city in the country’s far west, a significant expansion of their popular uprising a day after embattled strongman Moammar Kadafi vowed to defend his regime "to the last drop of blood," the Los Angeles Times’ Bob Drogin reported from Cairo.

Between 300,000 and 400,000 barrels per day of Libyan oil output, or as much as 25% of the total, already has been shut off as the revolt has spread, Reuters estimated.

Although Saudi Arabia’s oil minister pledged Tuesday that OPEC would be ready to pump more oil as needed to keep the world supplied, he said there was “absolutely no shortage of supply” at present.

Edward Meir, senior commodity analyst at MF Global in New York, said the latest jump in crude prices reflected traders' belief that "it is just a matter of time before all [Libyan] exports are shut down."

It's time for the Saudis to open their spigot wider, Meir said. "The market needs to see that the supplies are being replaced," he said.

On Wall Street the Dow Jones industrial average was off 113 points, or 0.9%, to 12,099 after slumping 178 points on Tuesday.

[Updated at the closing bell: The Dow ended with a loss of 107.01 points, or 0.9%, at 12,105.78, paring what had been a 149-point decline at the day's low point. Broader indexes also fell but overall the selling was less severe than on Tuesday.]

The market's decline would be worse without energy stocks, which were rocketing with crude prices. Exxon Mobil was up $2.04 to $87.48, Chevron gained $2.77 to $103.10 and ConocoPhillips jumped $2 to $78.61.

-- Tom Petruno