Crude oil rose to its highest level in almost three weeks in New York after comments by the US Vice President Dick Cheney boosted concern the US will attack Iraq, reducing supply from the Middle East.
Crude oil for October delivery rose as much as US$0.59, or 2 percent, to US$30.20 a barrel in electronic after-hours trading on the New York Mercantile Exchange, its highest price since Aug. 20.
It traded at 29.95 at 3:52pm Sydney time yesterday.
Cheney and other administration officials said yesterday the US can no longer ignore the threat posed by Iraq's reported efforts to get components for a nuclear bomb. The prospect of a US-led attack on OPEC's seventh-biggest producer has helped lift oil prices 50 percent this year.
"When the Americans really start attacking, then I think US$35 or US$40 really is possible," said David Thurtell, a commodities analyst at Commonwealth Bank of Australia.
Cheney's comments precede President George W. Bush's speech to the UN Thursday to present the case against Iraq.
"This problem has to be dealt with, one way or the other," Cheney told NBC's "Meet the Press" yesterday.
Saudi Arabia, OPEC's biggest producer, has said it would increase production to make up for any shortfall cause by a disruption in Iraqi sales.
"Every time it gets up towards that US$30 mark, people suddenly remember that the Saudis have agreed they will keep the market well supplied," Commonwealth Bank's Thurtell said. "If OPEC is persuaded to increase production, then suddenly there might be plenty of oil on the market."
OPEC is scheduled to meet in Osaka, Japan, on Sept. 18 and 19.
RSS