World
Institutional
links
Welcome back on
26 -29 August,
ONS 2008
Bridging
the energy gap
is ONS 2006 theme,
from 22-25 August,
in Stavanger, Norway
Petroleumworld
Business
Partners:
Centre for
Global Energy
Studies
  |
Crude oil prices surge close to new record highs on Iraq unrest
LONDON
Petroleumworld.com 10 15 07World crude prices surged within sight of new all-time record highs on Friday amid increasing tensions between Turkey and Kurdish rebels in oil-producer Iraq, traders said.
The autonomous Kurdish regional government in northern Iraq has warned Turkey against making good on its threat to mount a cross-border incursion to flush out suspected rear-bases of the rebel Kurdistan Workers' Party (PKK).
The tensions sent the price of Brent North Sea crude soaring to 80.87 dollars a barrel on Friday, just below its all-time record high of 81.05 dollars reached last month.
New York's light sweet crude soared to 84.05 dollars, five cents off its historic peak, which was also struck in September.
In late afternoon London trade, the price of Brent North Sea crude for November delivery stood at 80.85 dollars per barrel, up 70 cents on Thursday's close.
New York's main futures contract, light sweet crude for delivery in November, won 91 cents to 83.99 dollars per barrel.
"The reason the market is strong is concern over increasing tensions between Turkey and the Kurds," Alaron analyst Phil Flynn said.
"There's a strong possibility if we close above 84 dollars (in New York) this market could go higher yet."
Ankara charges the PKK has used bases in northern Iraq to launch a renewed offensive inside Turkey that saw 15 soldiers killed at the weekend.
Oil prices had begun spiking Thursday after the US Department of Energy said American crude reserves slumped by 1.7 million barrels in the week to October 5.
Market expectations had been for a 1.0-million-barrel gain.
The DoE added that US distillates, which include heating fuel, slid by 600,000 barrels, which was broadly in line with market expectations for a 775,000-barrel drop.
This week, the oil market has swung between losses and gains as sentiment was swayed by supply concerns and the flagging US dollar.
Prices slumped by more than two dollars on Monday as the dollar rose against the European single currency. A stronger US unit makes commodities priced in dollars more expensive for buyers using other currencies, and therefore weakens crude demand.
However, oil prices have since rebounded on renewed concerns over the strength of global supplies going forward, while the dollar also resumed its downward trend against major rival currencies.
Traders are worried about tight heating fuel supplies ahead of the approaching winter months in the northern hemisphere.
The prospect of lower US interest rates, which could increase global crude demand by stimulating the world's biggest economy and energy consumer, has also supported gains.
Meanwhile, the International Energy Agency (IEA), the developed world's energy watchdog, this week held steady its forecasts for oil demand for this year and next.
The IEA predicted average oil demand to be 85.9 million barrels per day in 2007 and 88 million bpd in 2008.
World oil supply increased by 415,000 bpd in September from August owing to higher output in North America, China and from OPEC members, averaging 85.1 million bpd, the watchdog said in its monthly report.
Story by AFP 12 1659 GMT 10 07
Copyright© 2007 Petroleumworld. All rights reserved.
Your
feedback is important to us!
We invite all our readers to share with us
their views and comments about this article.
Write to editor@petroleumworld.com
Any
question or suggestions, please write to:
editor@petroleumworld.com
Best
Viewed with IE
5.01+
Windows
NT 4.0, '95, '98 and ME +/ 800x600 pixels