Oil leaps more than $1.0 to records on Mexico, Turkey
Tuesday, 30 October 2007
SYDNEY, Oct 29 (Reuters): Oil leapt to a record high for a third day today, as a brief halt to one-fifth of Mexico's production added fuel to a rally driven by a stand-off between Turkey and Kurdish rebels, a weak dollar and winter supply fears.
US light crude for December delivery jumped by more than $1 to touch a record high of $93.19 a barrel, and was trading up $1.14 at $93.00 by 0358 GMT. Oil prices have soared by more than a third since mid- August, when they stood below $70.
London Brent crude also hit a record high at $90.00, up $1.31.
Prices rose after Mexico's state-owned oil company Pemex said it was shutting about 600,000 barrels per day (bpd) of oil output due to bad weather in the Gulf of Mexico and high terminal stocks, fanning concerns of a US supply shortfall this winter.
A spokesman said Pemex should be able to resume output "immediately" once the cold weather passed in two days. The country's three main export terminals were shut Sunday.
The precautionary closure came days after a storm killed at least 21 oil workers, provoking a flurry of criticism against Pemex for its safety standards.
Gains accelerated later in the day amid unusually heavy trade of 12,000 lots on the US front-month contract Monday, with some traders pointing to short-covering by options players or technical stop levels around the $93 a barrel mark.
After easing early last week, oil prices resumed their march toward the $100 mark after data showed a sharp drop in US crude stocks, the US dollar plumbed new lows and tension mounted between Turkey and Kurds in northern Iraq.
The dollar hit another record low against a basket of currencies Monday on expectations that the Federal Reserve will trim interest rates this week and possibly again this year.
Turkey's foreign minister Ali Babacan, speaking Sunday after talks aimed at averting a Turkish incursion into Iraq, said diplomatic and military operations could both be used in the country's fight against Kurdish guerrillas.
The abduction of foreign oil workers in Nigeria Friday that forced ENI unit Saipem and SBM Offshore to cut production by 50,000 barrels per day (bpd) also reignited fears of tighter winter supplies.
Despite the surge in oil prices, OPEC has shrugged off calls from importer nations to raise output.
Iran's oil minister said Saturday that world oil markets were well supplied, with petroleum inventories above average, reiterating suggestions earlier this week that the Organisation of the Petroleum Exporting Countries (OPEC) is not likely to raise output to calm markets.
US Vice President Dick Cheney also ruled out tapping the nation's oil reserve to rein in prices.
US light crude for December delivery jumped by more than $1 to touch a record high of $93.19 a barrel, and was trading up $1.14 at $93.00 by 0358 GMT. Oil prices have soared by more than a third since mid- August, when they stood below $70.
London Brent crude also hit a record high at $90.00, up $1.31.
Prices rose after Mexico's state-owned oil company Pemex said it was shutting about 600,000 barrels per day (bpd) of oil output due to bad weather in the Gulf of Mexico and high terminal stocks, fanning concerns of a US supply shortfall this winter.
A spokesman said Pemex should be able to resume output "immediately" once the cold weather passed in two days. The country's three main export terminals were shut Sunday.
The precautionary closure came days after a storm killed at least 21 oil workers, provoking a flurry of criticism against Pemex for its safety standards.
Gains accelerated later in the day amid unusually heavy trade of 12,000 lots on the US front-month contract Monday, with some traders pointing to short-covering by options players or technical stop levels around the $93 a barrel mark.
After easing early last week, oil prices resumed their march toward the $100 mark after data showed a sharp drop in US crude stocks, the US dollar plumbed new lows and tension mounted between Turkey and Kurds in northern Iraq.
The dollar hit another record low against a basket of currencies Monday on expectations that the Federal Reserve will trim interest rates this week and possibly again this year.
Turkey's foreign minister Ali Babacan, speaking Sunday after talks aimed at averting a Turkish incursion into Iraq, said diplomatic and military operations could both be used in the country's fight against Kurdish guerrillas.
The abduction of foreign oil workers in Nigeria Friday that forced ENI unit Saipem and SBM Offshore to cut production by 50,000 barrels per day (bpd) also reignited fears of tighter winter supplies.
Despite the surge in oil prices, OPEC has shrugged off calls from importer nations to raise output.
Iran's oil minister said Saturday that world oil markets were well supplied, with petroleum inventories above average, reiterating suggestions earlier this week that the Organisation of the Petroleum Exporting Countries (OPEC) is not likely to raise output to calm markets.
US Vice President Dick Cheney also ruled out tapping the nation's oil reserve to rein in prices.