Global oil prices advanced towards $103 in early European trade Friday as Libyan production dropped to 600,000 barrels a day.
London's Brent crude was seen trading at $115.83 a barrel at 9.00 a.m while US crude for April delivery was seen trading at $102.87 a barrel at the same time.
The black gold remained highly volatile despite aiming for yet another higher weekly finish as reports of intensified fighting between Libyan government and rebel forces, raising investor fears of more oil output.
Exports from Libya, Africa's largest proven oil reserves holder came to a standstill after rebels bolstered defenses around Libya's second-largest oil refinery in Brega.
In other Nymex trading in April contracts, heating oil rose 1.7 cents to $3.07 a gallon and gasoline gained 0.9 cent to $3.04 a gallon. Natural gas futures were down 1.7 cents at $3.76 per 1,000 cubic feet.
Analysts said oil prices are expected to remain bullish as Libya's opposition said there was no room for talks and Gaddafi must go.
Libya produces a very light sweet oil, which is easy to refine. Replacing lost oil production from Libya is not as easy as many believe.
Simply having spare capacity to produce more crude oil around OPEC does not mean that OPEC can compensate for the loss of Libyan crude oil to refiners.
