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World oil prices recover
AFP
LONDON
Petroleumworld.com 08 11 06
Oil prices rebounded on Friday as markets shrugged off concerns over a thwarted plot to blow up planes flying to the United States, analysts said.
In London, Brent North Sea crude for September delivery climbed 71 cents to 75.99 dollars per barrel in electronic trading, having closed down 2.00 dollars on Thursday.
New York's main contract, light sweet crude for delivery in September, gained 66 cents 74.66 dollars per barrel in electronic deals on Friday before the official opening of the US market. The contract had tumbled 2.25 dollars Thursday.
"Oil prices were higher this morning as the impact of a foiled terrorist attempt in the UK on air travel was limited and traders concentrated on continued violence in the Middle East," Sucden analyst Michael Davies said.
Prices had dived Thursday on predictions that air traffic could suffer after British authorities said they had thwarted a major bomb plot targeting US-bound passenger planes.
"I think that was a knee-jerk reaction of the market," Victor Shum, a Singapore-based analyst with energy consultancy Purvin and Gertz, said Friday.
Shum said other factors were driving oil prices higher, citing the Israeli offensive in Lebanon, Iran's defiance of Western powers' efforts to curb its uranium enrichment programme, potential hurricane damage to oil installations and the disruption of British energy giant BP's operations in Alaska.
"In this oil market today, there are many moving parts and the markets will remain very volatile reacting to short-term world events. The market still has more upside than downside," Shum said.
Traders reacted to the latest oil market review by the International Energy Agency.
The IEA held its estimate of world oil product demand unchanged at 84.8 million barrels per day this year and said that the market had a fragile cushion to absorb supply disruptions in Alaska and elsewhere.
"For the time being, the market can cope with current outages," the Paris-based organisation said.
It added that the impact of disruption to supplies from the BP field in Prudhoe Bay, Alaska, would probably be substantially less than the 400,000 barrels per day reported because of offsetting factors elsewhere.
BP said on Thursday that it was still producing 120,000 barrels of oil per day from its stricken Prudhoe Bay field and hoped to keep some output operational.
The company said it was working hard to "ensure the integrity" of its transit lines at America's biggest oil field, where a corroded BP pipeline was found to be leaking oil nearly a week ago.
Oil prices shot up earlier this week on the BP news, with Brent crude striking a fresh record high of 78.64 dollars per barrel.
AFP 11 1100 GMT 08 06
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