Oil, silver soar as Mid-East violence erupts

Oil and metal prices have soared and sharemarkets fallen as violent clashes between protesters and government forces in Libya revived fears of disruptions to Middle East oil supplies.

Anti-government protests have spread throughout Libya's major cities, including the capital Tripoli, and reports say dictator Muammar Gaddafi has lost his grip on power and has fled.

Several oil companies, including BP, are pulling personnel from the country. Around 50,000 barrels a day of production has been shut down, according to the International Energy Agency. Libya is Africa's fourth biggest oil exporter, producing 1.6 million barrels a day.

The front-month April Brent contract on London's ICE futures exchange was up $US1.95, or 1.9%, at $US104.47 a barrel, having hit a two-year high of $105.08 earlier. The front-month March contract in New York was up $3.33, or 3.9%, at $US89.53 a barrel at the end of last week, its highest since February 4.

Markets in New York are closed because of the US Presidents’ Day holiday.

Silver at 31-year high
Meanwhile, the spot price of silver has broken through the $US33 an ounce level to a 31-year high of $33.82. Prices haven't been this high since the market was caught in a high-profile squeeze by the Hunt brothers in early 1980.

Gold prices also rose, pushing through $US1400 an ounce. Spot gold in London was up $US16.90, or 1.2%, at $US1406 an ounce. Gold reached a record of $US1431.30 in December.

Shares fall in Europe, mixed in Asia
Sharemarkets in Europe shares fell sharply, with the Stoxx Europe 600 index finishing down 1.3% at 287.18.

Italian shares were hit particularly hard by the escalating violence in Libya, with the benchmark FTSE MIB index falling 3.6% to 22,230.20. Companies with significant exposure to the country include aerospace-and-defence firm Finmeccanica, which fell 2.7%, energy company ENI, off 5.1%, and bank UniCredit, which dropped 5.7%.

The UK's FTSE 100 dropped 1.1% to 6014.80, France's CAC 40 fell 1.4% to 4097.41 and Germany's DAX 30 declined 1.4% to 7321.81.

In China, shares advanced as investors shrugged off the latest tightening measures from Beijing, but airlines underperformed in Shanghai and Hong Kong after a weekend increase in fuel prices.

Ranking among gainers, Japan's Nikkei Stock Average added 0.1% 10,857.53, while China's Shanghai Composite index climbed 1.1% to 2932.25.

Hong Kong's Hang Seng index fell 0.5% to 23,485.42, Taiwan's Taiex slipped 0.1% to 8839.22, Korea's Kospi gave up 0.4% to 2005.30 and Australia's S&P/ASX 200 dropped 0.7% to 4899.99. India's Sensex rose 1.3% to 18,438.31.