Oil prices rise higher on Libyan supply concerns

World stocks declined further from a recent 30-month high today while the euro was up as unrest in Libya pushed oil higher amid concerns about inflation hurting global economic recovery.

Wall Street recorded its worst day since August yesterday as the Libyan crisis gave investors an excuse to sell stocks, and consolidate positions following a rally, that drove world stocks 6 per cent higher this year.

The sharp rise oil price coincides with fast-growing emerging economies experience increasing price pressure and the need to hike interest rates.

European Central Bank officials also indicated they were bracing to fight inflation with tighter monetary policy yesterday.

According to analysts there was very little reason why people should be adding to risk at the juncture. They add that the Middle East happenings would affect markets until any proper direction is seen.

Though popular protests forced entrenched leaders in Egypt and Tunisia to take flight, Libya's defiant leader Muammar Gaddafi said he would not be forced out by the unrest sweeping Africa's third-largest oil producer.