Oil prices rebounded Wednesday as traders recalibrated energy demand in the wake of numerous international crises.
Benchmark crude for April delivery gained $2.20 at $99.38 per barrel on the New York Mercantile Exchange. In London, Brent crude rose $2.40 to $110.92 per barrel on the ICE Futures exchange.
A series of global events have rattled markets in the past several weeks, and analysts say oil prices are headed for wild swings as perceptions shift about how energy prices will affect the global economy.
"There's just so much uncertainty," PFGBest analyst Phil Flynn said. "Everyone's trading emotionally."
Here are some of the issues moving energy prices this week:
_In Libya, Moammar Gadhafi continued to pound rebel strongholds in a conflict that has halted the country's oil exports. Before the uprising, Libya produced about 1.6 million barrels per day, and exported enough of that to satisfy nearly 2 percent of world demand. Saudi Arabia and a few other OPEC countries have increased production to make up for the loss of Libyan crude, but it's not an equal match, and demand is expected to rise for the high quality crude that Libya usually exports to Europe.
_In Bahrain, soldiers and riot police clashed with protesters demanding political reforms. Bahrain doesn't produce much oil of its own, but the country is adjacent to Saudi Arabia, the world's biggest producer of oil. If the uprising grows, analysts fear that it could spill over the border and affect Saudi oil fields. Experts also worry that another OPEC heavyweight, Iran, may be swept by uprisings. Bahrain is also strategically important to the U.S. as home to the navy's 5th Fleet.
"The Bahrain/Saudi situation is a powder keg," analyst and trader Stephen Schork said.
_After homes and businesses were destroyed by Japan's earthquake and tsunami, energy demand is expected to initially decline in the world's third-largest economy. But economists say the country will need to boost imports of oil, natural gas and coal as it makes up for power lost from damaged nuclear energy facilities in the north. .
_Barclays Capital estimates that Japan will need to increase imports of coal by 7,800 tons per day and of fuel oil by 143,000 barrels per day. The country will need an extra 67,000 barrels per day of crude and 800 million cubic feet per day of liquefied natural gas.
The combination of major events will raise doubts about world energy demand and supply this year. Swiss oil services company Weatherford International Ltd. told the Securities and Exchange Commission Tuesday that it could not provide earnings guidance for the full year because of a variety of issues, including political instability in the Middle East and North Africa.
On Wednesday the world's largest oil consumer, the U.S., reported that its crude oil supplies grew by 1.7 million barrels last week, a little less than 2.1 million barrels analysts expected, according to Platts, the energy information arm of McGraw-Hill Cos.
Meanwhile, gas pump prices dropped for a second day on Wednesday, though they're still at the highest levels ever for this time of year. The national average for a gallon of regular fell less than a penny to $3.553 per gallon, according to AAA, Wright Express and Oil Price Information Service. That's 42.7 cents more than a month ago and 76.6 cents higher than a year ago.
In other Nymex trading for April contracts, heating oil added 7 cents at $3.0278 per gallon and gasoline futures gained 7 cents at $2.8714 per gallon. Natural gas rose 4 cents to $3.981 per 1,000 cubic feet.