Oil prices leaped to a seven-week high on Friday on a gasoline pipeline blaze near former Iraqi dictator Saddam Hussein's hometown, traders said.
US light sweet crude closed US$1.76, or nearly 6 percent, higher at US$32.25 a barrel while London benchmark Brent crude rose US$1.60 to US$29.97.
Firefighters tried in vain to extinguish a blaze at the gasoline pipeline in northern Iraq, near the nation's biggest refinery. The line runs between Baiji and Tikrit, Hussein's hometown. It was ablaze on Friday, more than 12 hours after a fire broke out, a spokesman for the US-led administration for Iraq said.
Residents told reporters the blaze began after an explosion and they claimed it was the work of saboteurs.
Baghdad has only just reached output of one million barrels per day (bpd) compared to pre-war capacity of 2.8 million bpd. Sabotage and damage from fighting have hampered efforts to restore flows.
A strong tropical wave in the far eastern Atlantic Ocean was organizing and could become a tropical depression over the next two days, the National Hurricane Center (NHC) said on Friday.
Early Friday, the storm was located about 1,950 km east-southeast of the Windward Islands, moving westward at 32-40 kph, the NHC said.
Prices were also supported by delayed reaction the Organization of Petroleum Exporting Countries' holding output at 25.4 million bpd at its meeting in Vienna on Thursday.
Analysts predicted the slow return of Iraqi crude exports could lead the cartel to leave production levels intact for the rest of the year.
Some OPEC insiders and analysts now believe the cartel will be able to avoid production cuts for the rest of the year as Iraq's struggles to get oil flows back to pre-war levels will keep supplies tight and sustain high prices.
"It's unfortunate for Iraq, but depending on what happens there we could get away with doing nothing this year," said a senior OPEC delegate.
This could mean consumer countries hoping for cheaper oil will be disappointed, especially as oil stocks in the US, the world's biggest consumer, are roughly 10 percent lower than a year ago.
OPEC will meet again on September 24 to review supplies and has said it will increase production if prices exceed its target range of US$22 to US$28 for its reference basket of crudes.
Meanwhile, local employee of US oil giant ChevronTexaco in Nigeria who was abducted last week has been released, the company said yesterday.
The worker, who was not named, was kidnapped on July 25, allegedly by the Egbema National Front, an Ijaw ethnic group, in Warri in the Niger Delta region, which is home to much of Nigeria's multi-billion dollar oil and gas resources.
The worker was released following the intervention of community leaders and the region's state government, Chevron said in a statement here.
RSS