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Crude prices gain in Asian trade on geopolitical worries
AFP
SINGAPORE
Petroleumworld.com 11 28 06Oil prices rose in Asian trade Tuesday on geopolitical worries and hopes for further OPEC production cuts, dealers said.
At 11:04 am (0304 GMT) New York's main contract, light sweet crude for January delivery, was up 17 cents to 60.49 dollars a barrel from 60.32 dollars in late US trade Monday.
Brent North Sea crude for January delivery gained 16 cents to 60.60 dollars.
"The geopolitical factors seem to be resurfacing in the market. The unrest in Nigeria and the tension in the Middle East have been constant, chronic problems and could affect the market at any point," said Tony Nunan, manager of energy risk management with Mitsubishi Corporation in Tokyo.
"Also there is some market concern about the repeat of a spike in oil prices caused by the problems in Lebanon."
Oil prices peaked at above 78 dollars in July during Israel's 34-day war with the Hezbollah Shiite militia in Lebanon. Tensions have escalated again with the recent assassination of Lebanon's anti-Syrian industry minister Pierre Gemayel.
Oil prices had begun climbing again on Friday after reports that Italian oil major ENI was reducing Nigerian exports after the latest separatist attack in Africa's biggest crude producer.
Dealers said the bombing of Iraq's main northern oil distribution centre also supported prices.
"This is the first time this installation has been attacked with such force," said an official with the Northern Oil Company, who would not reveal the extent of the damage or whether pumping had ceased.
Exports from the northern fields in OPEC-member Iraq only resumed in October after a hiatus of several months due to sabotage, with output at 250,000-300,000 barrels per day.
Saudi Oil Minister Ali al-Nuaimi was reported over the weekend as signalling the possibility of another output cut by OPEC after the cartel agreed in October to take 1.2 million barrels per day (bpd) off the market.
Cartel members Nigeria, Qatar and Venezuela had already suggested that a cut was possible when the Organization of the Petroleum Exporting Countries meets in Nigeria on December 14.
But the market has remained doubtful over how seriously the cartel is implementing the October decision, which was made in a bid to stem the sharp fall in crude prices from their summer highs during the Israeli-Hezbollah war.
"I think that some cuts have happened and as Saudi, the most important producer of OPEC, seems to be serious about the October cuts we should see at least half of the supposed cuts," Nunan said.
"Saudi also seems serious about more cuts in December and as long as Saudi follows through, I think it will be enough to support the market to give it some stability," he said.
AFP 28 0325 GMT 11 06
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