Analysts on Friday dismissed a threat by Libya to cut its oil production in response to legislation that would allow the US to sue Opec members for manipulating international oil prices.

The Libyan threat caused oil prices to jump above $142 a barrel for the first time on Friday, serving as a stark reminder of the nervousness in the oil market due to the small amount of spare production capacity available to absorb any supply shock.

Traders jumped on the threat, buying oil futures as the market’s cushion to absorb a supply disruption has fallen to one of its lowest levels in the last decade. Oil prices in New York on Friday surged to a fresh record high of $142.26 a barrel. ... Read full article