Societe Generale said that Brent crude futures could hit USD 200 per barrel if political unrest spreads into Saudi Arabia. North Sea Brent crude futures were trading about 60 cents higher at around USD 117 per barrel. US crude was around USD 105.70.

Brent crude has been hovering just below the USD 119 level hit late in February its highest price since the Q3 of 2008 as the unrest in Libya has cost the country a loss of about 1 million barrels of crude production per day out of its normal 1.6 million barrels per day output.

Societe Generale listed some scenarios that could have an impact on oil prices with its most extreme scenario showing Brent prices sharply high. It said that Geopolitical Scenario 3: Unrest spreads to Saudi Arabia and threatens Saudi crude exports and any remaining spare capacity. Brent price range of USD 150 per barrel to USD 200 per barrel.

The bank said that in this most extreme, worst case scenario for the oil markets, serious unrest spreads to Saudi Arabia. In this case, it does not really matter if Libya or any other producers are shut down or not. Saudi Arabia is OPEC's biggest producer and the world's biggest current holder of spare capacity.

(Sourced from www.arabianbusiness.com)