Crude oil prices rose in Asia yesterday -- spiking above US$92 a barrel at one point -- on a rumbling of tensions in the Middle East and renewed concerns about oil supplies.
Lebanese troops fired on Israeli warplanes on Thursday, and while a conflict between Israel and Lebanon would not directly affect oil supplies, traders worry any hostilities in the Middle East would draw in oil producers such as Saudi Arabia and Iran.
Also, the US announced on Thursday new sanctions against Iran, targeting the elite Revolutionary Guards, which Washington accuses of supporting terrorism by backing Shiite militants in Iraq. Any confrontation between the world's largest oil consumer and its fourth-largest oil producer has the potential to roil markets.
Light, sweet crude for December delivery rose US$1.47 to US$91.93 a barrel in electronic trade on the New York Mercantile Exchange by midafternoon in Singapore. It briefly rose to a new trading record of US$92.22 during Asian trading.
The Nymex crude contract jumped US$3.36 to settle at US$90.46 a barrel on Thursday in the US, closing above US$90 a barrel for the first time.
Amid the tensions, Organization of Petroleum Exporting Countries (OPEC) Secretary General Abdalla el-Badri told the Wall Street Journal Asia on Thursday that the cartel was not in discussions to boost production by 500,000 barrels.
The comments counter rumors that Saudi Arabia is pushing for another production increase after pressuring the group into one of similar size that goes into effect next Thursday.
And while US crude stocks fell to a nine-month low last week, Dow Jones Newswires reported that Oil Movements, a company that tracks oil tanker traffic, said extra crude shipments from OPEC members next month would grow more slowly than anticipated.
Energy traders also remain concerned that a threatened incursion by Turkish armed forces into Iraq in search of Kurdish rebels would cut oil supplies.
The combination of supply worries and geopolitical concerns has pushed crude oil prices up more than 6 percent since Tuesday.
Prices first jumped sharply on Wednesday after the Energy Information Administration reported that oil inventories fell 5.3 million barrels last week when analysts had expected them to grow 300,000 barrels. That report reversed a three-day downward price trend and put energy traders back in a bullish mood, analysts said.
December Brent crude rose US$1.27 to US$88.75 a barrel on the ICE futures exchange in London. Nymex heating oil futures rose US$0.0242 to US$2.4326 a gallon (3.8 liters), while gasoline prices advanced US$0.0289 to US$2.2647 a gallon. November natural gas futures fell US$0.042 to US$7.146 per 1,000 cubic feet (28.3 cubic meters).
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