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Oil prices rose to fresh two-year highs around $96 a barrel Wednesday amid concerns that a violent power struggle in Libya could disrupt supplies, with experts warning the next weeks and months would prove highly volatile.
If the chaos spreads to other bigger energy producers in the region, such as Iran or Saudi Arabia, price fluctuations could became as sharp as those in the 1970s, when an OPEC embargo caused gasoline shortages in the U.S., analysts warned.
By early afternoon in Europe, benchmark crude for April delivery was up 74 cents at $96.16 a barrel -- the highest since October 2008 -- in electronic trading on the New York Mercantile Exchange. The contract jumped $5.71, or 6.4%, to settle at $95.42 on Tuesday.
In London, Brent crude for April delivery gained $1.65 to $107.43 a barrel on the ICE Futures exchange.
Libyan leader Moammar Gadhafi on Tuesday called on supporters to attack anti-government demonstrators as protesters backed by defecting army units claimed control over almost the entire eastern half of the country, including several oil-producing areas.
Nearly 300 people have been killed so far in the rebellion, according to a partial count by the New York-based Human Rights Watch.
Libya holds the most oil reserves in Africa and is the world's 15th-largest crude exporter at 1.2 million barrels per day, according to the Energy Information Administration.