RIYADH: The oil price which rocketed to above $107 a barrel on Tuesday is reacting to unrest sweeping the Middle East and not to fundamentals, the United Arab Emirates energy minister said.
"The market is reacting to violence in the Middle East... and not to fundamentals," Mohammad bin Dhaen al-Hamli told reporters on the sidelines of a producer-consumer meeting in the Saudi capital.
Brent prices broke past $107 in Asian trade Tuesday as violence in Libya and Bahrain threatened to destabilise the key oil-producing Middle East and North African region.
Brent North Sea crude for delivery in April gained $1.53 to $107.27 per barrel in the afternoon, surpassing two-year highs reached on Monday.
New York's main contract, light sweet crude for March delivery, surged $7.20 to $93.40 per barrel on its last trading day.
"We (OPEC) are watching the situation and ready to act when necessary," said Hamli who declined to be drawn on when it will be time to intervene by the Organisation of Petroleum Exporting Countries.
Hamli said OPEC was concerned about the developments in Libya "because it is a member of OPEC and a major oil producer."
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