Crude oil rose for a seventh session on supply worries, as traders speculated that the US is readying an attack on Iraq and falling imports have sent US inventories to a 1 1/2-year low.
Prices have been climbing on signs the US is preparing for an invasion of Iraq. President George W. Bush has repeatedly called for the ouster of Iraqi President Saddam Hussein on grounds that he is developing weapons of mass destruction. Supply concerns were heightened by an industry report this week of a 9.5 million-barrel decline in US inventories.
"Nobody wants to sell going into the weekend with the Iraq problem," said Aaron Kildow, a broker at Prudential Securities Inc in New York.
Crude oil for September delivery rose US$0.27, or 0.9 percent, to US$29.33 a barrel on the New York Mercantile Exchange, the highest closing price since May 14. Prices rose 9.2 percent this week, the biggest gain since April. Tensions in the Middle East, where about a third of the world's oil is pumped, have helped send oil futures up 48 percent this year.
October Brent crude-oil futures contract rose US$0.15 to US$27 a barrel in the UK. London futures rose 7.2 percent this week.
In addition to Iraq "there are fundamental reasons why oil is going up," said Aaron Brady, an analyst at Energy Security Analysis, Inc at Wakefield, Massachusetts. "The effect of OPEC production cuts since Jan. 1 means the global crude-oil market is in deficit. Demand is higher than supply, especially in the US."
OPEC has kept its production quotas at their lowest in more than a decade to prop up prices.
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