Global oil prices jump to 11-month highs
Sunday, 8 July 2007
NEW YORK, July 7 (AFP): Global oil prices surged yesterday to their highest level in nearly a year, driven by heightened unrest in Nigeria and concerns about low US gasoline supplies.
New York's main oil futures contract, light, sweet crude for delivery in August, closed one dollar higher at 72.81 after rising to an intraday high of 72.94 dollars-the highest level since August 25, 2006.
In London, Brent North Sea crude for August delivery gained 87 cents to settle at 75.62 dollars per barrel. Earlier it had reached 76.01 dollars for the first time since August 11.
"Obviously, growing anxiety over the global supply situation is swelling the security premium," said Michael Fitzpatrick of Man Financial.
"With violence in Nigeria escalating this week following the end of a month-long truce between government and militant leaders, OPEC's unwillingness to raise output and Iran facing another round of sanctions, are all adding to a conclusion that oil will be increasingly seen as a vehicle for political leverage," he said.
Prices also were supported by a US Department of Energy (DoE) report Thursday showing American gasoline (petrol) reserves were about 4.2 per cent below their level at the same time last year.
BNP Paribas analyst Harry Tchilinguirian said fresh violence in Nigeria has been bullish for prices because Nigerian crude has a high gasoline content and US refinery output has been hampered by outages.
Nigeria is the world's eighth-largest exporter of crude oil. But its daily exports of 2.6 million barrels have been reduced by a quarter because of unrest in the oil-producing south.
The Brent oil price is now just a few dollars off its record high of 78.64 dollars per barrel, struck at the start of August 2006. But New York crude has some ground to cover before reaching its historic peak of 78.40 dollars per barrel, set in mid-July 2006.
The United States is currently facing its annual peak demand for gasoline as drivers take to the roads en masse for their summer vacations.
New York's main oil futures contract, light, sweet crude for delivery in August, closed one dollar higher at 72.81 after rising to an intraday high of 72.94 dollars-the highest level since August 25, 2006.
In London, Brent North Sea crude for August delivery gained 87 cents to settle at 75.62 dollars per barrel. Earlier it had reached 76.01 dollars for the first time since August 11.
"Obviously, growing anxiety over the global supply situation is swelling the security premium," said Michael Fitzpatrick of Man Financial.
"With violence in Nigeria escalating this week following the end of a month-long truce between government and militant leaders, OPEC's unwillingness to raise output and Iran facing another round of sanctions, are all adding to a conclusion that oil will be increasingly seen as a vehicle for political leverage," he said.
Prices also were supported by a US Department of Energy (DoE) report Thursday showing American gasoline (petrol) reserves were about 4.2 per cent below their level at the same time last year.
BNP Paribas analyst Harry Tchilinguirian said fresh violence in Nigeria has been bullish for prices because Nigerian crude has a high gasoline content and US refinery output has been hampered by outages.
Nigeria is the world's eighth-largest exporter of crude oil. But its daily exports of 2.6 million barrels have been reduced by a quarter because of unrest in the oil-producing south.
The Brent oil price is now just a few dollars off its record high of 78.64 dollars per barrel, struck at the start of August 2006. But New York crude has some ground to cover before reaching its historic peak of 78.40 dollars per barrel, set in mid-July 2006.
The United States is currently facing its annual peak demand for gasoline as drivers take to the roads en masse for their summer vacations.