Oil prices could peak at more than $220 a barrel if Libya and Algeria both halted production as a result of spreading violence in the Middle East and North Africa, Japanese bank Nomura said.

Analysts compared the current situation to the 1990-91 Gulf War when prices jumped 130 percent over seven months as Opec spare capacity was reduced to 1.8 million barrels per day.

'If Libya and Algeria were to halt oil production together, prices could peak above $220 per barrel and OPEC spare capacity will be reduced to 2.1 million barrels per day, similar to levels seen during the Gulf war and when prices hit $147 a barrel in 2008,' the Japanese bank said in a note.-Reuters