Commodity Corner: Oil Gains 8.5%

Crude oil for March delivery surged 8.5 percent Tuesday the conflict in Libya escalated.

Front-month crude ended the day at $93.57 a barrel as investors monitored reports of mounting violence against anti-government protesters in Libya. Longtime Libyan strongman Muammar Gaddafi has unleashed troops and mercenaries against those opposing his rule. Speaking on state television Tuesday, Gaddafi pledged to crush the revolt that has already released the eastern portion of the North African country from his grip.

Various foreign oil companies with operations in Libya have been evacuating personnel and suspending operations in the country, which the U.S. Department of Energy reports has the largest proven oil reserves in Africa. Seeking to reassure oil markets, the head of OPEC, Saudi Arabian oil minister Ali al-Naimi, on Tuesday said the cartel could meet any shortfall in Libyan production. According to Energy Information Administration figures, Libya produces approximately 1.8 million barrels per day.

Oil traded within a range from $86.25 to $94.49 Tuesday. The futures price of gasoline, which frequently corresponds to that of oil, also increased Tuesday but much less dramatically. March gasoline gained a nickel to settle at $2.60 a gallon after fluctuating from $2.56 to $2.68.

March natural gas lost a penny Tuesday and settled at $3.87 per thousand cubic feet. It peaked at $3.99 and bottomed out at $3.82.