Oil hits 2-year high

SINGAPORE: Oil climbed to its highest level in two years - on Friday as supply cuts resulting from attacks on the oil fields of Libya shift on the demand stimulated by a large replica in Japan.

Brent crude jumped to a intraday high of 123.50 dollars a barrel, the highest since August 2008. The first contract in May traded up 74 cents at $ 123.41.

U.S. crude rose 81 cents to $ 111.11, after touching a high of $ 111.19 earlier, the highest since September 2008.

Soaring oil prices, with gold and record food prices, have fueled inflation fears of governments around the world because of the potential negative impact on economic growth of the rising cost of food and raw materials .

"Oil prices are at a point where we could start to see demand destruction," said Mike Wittner, head of research products at Societe Generale.

"It already looks like the U.S. is perhaps some evidence of demand destruction. The United States is still the country where you see the greatest impact because there is virtually no subsidies and no charge tax. "

Unrest in the Arab world has added a premium of $ 20-25 oil price since the overthrow of regimes in Tunisia and Egypt in recent months, "said Wittner.

The International Monetary Fund said Thursday that the global economy was entering a period of increasingly scarce oil, adding that the tightening fundamentals could lead to higher prices rivaling the perspective of 2008 that led oil to nearly 150 dollars per barrel.